Nationalists win and globalists go home after Trump tariffs

- Maret 08, 2018

Gary Cohn walked into the Oval Office earlier this year armed with data and economic reports he believed clearly showed that imposing harsh tariffs on steel and aluminum imports would backfire.

President George W. Bush tried and failed to do the same thing in 2002 and the fallout could be even worse this time, Cohn argued. And besides, he added, there are far more American jobs in the industries that rely on cheap steel and aluminum than in those that produce the materials.

But President Donald Trump was unmoved.

“You get me three different economists and they’ll have three different arguments,” Trump said, according to a person familiar with the meeting, dismissing the facts and figures. Cohn and a White House spokeswoman did not respond to a request for comment.

Establishment Republicans and even some Democrats joined the Trump administration last year under the assumption that the political neophyte president would be malleable when it came to key policy issues.

But facing an obstinate president backed by vocal advisers who warned him against abandoning his campaign promises, the so-called “globalists” in the administration never had much of a chance of completely changing the president’s mind on issues about which he is passionate. At 71, Trump is stubborn and headstrong – and he has long maintained that waffling is a sign of weakness.

The president sees steelworkers and other “forgotten men and women” in rural parts of the country, as he often calls them, as the core part of his political base, and he believes that betraying them would be political suicide as he looks ahead to his reelection campaign, according to aides.

“The president talked about [trade] during the campaign, and the people voted for him. States that never voted for a Republican came over into his column,” said Curtis Ellis, the senior policy adviser at the pro-Trump outside group America First Policies. “It’s not just a theoretical discussion about economic nationalists versus globalists. It’s about what works and a lot of these globalist policies never delivered as advertised.”

That conviction has prompted Trump to repeatedly dismiss the advice offered by Cohn, Trump’s outgoing director of the National Economic Council, and other more establishment figures.

Trump’s brand of economic nationalism, buoyed by three decades of frustration with U.S. trade policy, proved nearly impossible to puncture as Cohn and others sought to argue against the tariffs. Trump’s final decision on the levies mirrored his move to ignore the advice of Cohn and others, including his daughter Ivanka and son-in-law Jared Kushner, and announce his intention last year to pull the United States out of the Paris climate agreement.

“The president has strong views on trade. He is willing to listen to people and cut deals, but he is not going to do a 180-degree turn on one of his core principles,” said a former campaign official.

Trump unveiled his new tariffs on Thursday surrounded by steel and aluminum industry workers, inviting them to tell their stories during the White House event.

When steelworker talked about the hardships he faced after his father lost his job, Trump said, “Well, your father, Herman, is looking down. He’s very proud of you.” Informed that the man’s father was still alive, Trump quipped, “Then he’s even more proud.”

Trump’s top advisers gathered around him as he announced the tariffs. Cohn and Trump’s son-in-law Jared Kushner, long a close Cohn ally, were reportedly standing in the back of the room, out of the range of the cameras.

Among Trump’s longtime backers inside and outside the White House, frustration with Cohn and other moderates runs deep. These people regularly complain – in public and in private – about the “globalists” in the administration, and many of the president’s conservative supporters cheered when Cohn announced he would resign.

Cohn early on served as a natural foil for economic nationalists like former chief strategist Steve Bannon, who – in a bid to convince Trump not to waver from his campaign pledges – stoked fears that the “New York Democrats” would ruin Trump’s presidency.

“Globalists were always a threat to Trump’s economic nationalism,” a former White House official said, adding that they tried to thwart “every move with whining about the corporate tax cuts of the stock market.”

While Trump has clearly sided with the nationalists on tariffs, Cohn and the remaining globalists believe they’ve succeeded in moderating some of the president’s more extreme impulses. Cohn steered Trump toward exempting some allies from the steel and aluminum tariffs. They have also kept the United States in NAFTA, so far. And Cohn scored perhaps his biggest victory when Congress passed a once-in-a-generation rewrite of the tax code.

Outside groups, for their part, are less interested in the economic nationalist versus globalist fights in the White House.

“We’d rather just look at things on a case-by-case basis. We really don’t get involved in labels or call which of those various labels are winning or losing,” said Tim Phillips, the president of Koch brothers-backed group Americans for Prosperity, which criticized Trump’s tariff decision and praised the tax reform push.

Meanwhile, people sympathetic to Cohn’s worldview inside the administration say it’s not a matter of big wins but rather avoiding even larger potential losses.

“It’s not that Gary won a lot,” one administration official said shortly before the NEC director announced his departure. “But think of some of the outcomes without him.”

Nancy Cook and Ben White contributed to this story.


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