"Civil War" Breaks Out At White House Over Trade... And Goldman Is Winning

Tyler Durden's picture

Earlier this week, when we discussed Peter Navarro's jarring op-ed in the WSJ in which he alleged that the persistent US trade deficit "would put US national security in jeopardy", we said that "a better question than what is Navarro's purpose by writing it, is why he is writing it, and does his use of a public forum like the WSJ mean that there is friction between him and Trump camp, especially since in recent weeks it appears that a core pillar of Trump's trade policies, namely the border adjustability, appear to no longer be on the docket of actionable items."

As it turns out, that was precisely the correct question, because as the FT reports, "a civil war has broken out within the White House over trade, leading to what one official called "a fiery meeting" in the Oval Office pitting economic nationalists close to Donald Trump against pro-trade moderates from Wall Street."

More notably, the person at the center of this "civil war" is none other than Navarro, who as we expected is now said to be losing influence, and as a result he resorted to using the WSJ as a means to appeal directly to the general public. It may have been a prudent gamble: the WSJ op-ed may have helped Navarro salvage some of his credibility with Trump, according to the FT:

The officials and people dealing with the White House said Mr Navarro appeared to be losing influence in recent weeks. But during the recent Oval Office fight, Mr Trump appeared to side with the economic nationalists, one official said.

Facing off the "hardline group" of Navarro, and other "nationalists" such as Steve Bannon, is a a "faction" led by former Goldman COO Gary Cohn, a career globalist, who leads Mr Trump’s National Economic Council.

But what is just as important, is that if the FT is right, then allegations that Trump has "sold out" to his Goldman advisors may be premature: in fact, if anything, Trump appears to be playing off one camp, the "nationalists", against its polar opposite, the "Goldman globalists":

The battle over trade is emblematic of a broader fight on economic policy within the Trump’s administration. It comes ahead of a visit to Washington next week by Ms Merkel, the German chancellor, and amid preparations for a meeting of G20 finance ministers in Germany next week at which allies’ concerns over protectionism are likely to be high on the agenda.

While the White House was non-committal, providing the FT with the following brief statement:

“Gary Cohn and Peter Navarro are both valued members of the president’s economic team. They are working together to enact the president's economic agenda, protect American workers and grow American businesses.”

... the "globalists" led by Cohn and others "have seized on Mr Navarro’s public comments — and widespread criticism by economists of his stand on trade deficits and other matters — to try and sideline him."

That has led to discussions over moving Mr Navarro and the new National Trade Council he leads out of the White House and to the Commerce Department, headed by another Wall Street veteran, Wilbur Ross.

And, if the FT is correct, it appears that the Goldman-led faction is winning:

Cohn has also been featuring more prominently in discussions over the renegotiation of the North American Free Trade Agreement with Canada and Mexico, one of Mr Trump’s top trade priorities. After a meeting with Mr Cohn and other White House officials on Thursday, Mexico’s foreign minister, Luis Videgaray, said the goal was to wrap up talks quickly and by the end of this year. That contradicted Mr Ross, who has called for deeper and potentially longer talks that could drag well into next year.

Cohn's sidelining of Navarro has only picked up recently, and in an attempt to alienate him from Trump, he has become "an increasingly isolated figure in the administration. He has been operating with a very small staff out of an office in the Old Executive Office Building adjacent to the White House while Mr Cohn, who has been adding staff to his NEC base inside the president’s residence itself."

Meanwhile, Cohn has been beefing up his staffing ranks with more, like-minded "globalist" supporters, such as Andrew Quinn, a former trade official who served as a senior negotiator during the Obama administration’s push for a Trans-Pacific Partnership with Japan and 10 other countries. In other words, someone who is desperate for much more, not less, global trade alliances. The White House last month announced Mr Quinn would serve on the NEC as a “special assistant to the president” for international trade. Quinn's appointment led to an outburst from Breitbart, which labelled the career official an “enemy within” the Trump administration earlier this month.

The bottom line, however, is that the fate of Trump's trade policies may rest in the fate of Navarro, and to a lesser extent Bannon: the two are the last bastion to push for Trump's initial protectionist policies; should they fade, it will be the policies of "Goldman" that end up being enacted. As the FT further notes, "Mr Navarro’s apparent sidelining have been helped ease some foreign officials’ concerns about the prospects of the Trump administration acting on campaign threats to raise tariffs and take other aggressive steps that could lead to a trade war."

“The situation is less worrying than it was two months ago because [Mr] Navarro seems to be more and more marginalised,” said one European official. “His influence seems to be diminishing quickly.”

And while Navarro's ultimate fate remains unclear, a new, and more interesting "civl war" may emerge should he lose all influence: American trade unions vs "Goldman Sachs."

Thea Lee, a top trade official at the AFL-CIO, the US’s largest union, and a member of the president’s recently-appointed manufacturing council, said Mr Trump appeared to be bending to the growing influence of the administration’s Wall Street veterans and walking away from his campaign promise for a fresh approach to trade.


“At the moment it appears that the Wall Street wing of the Trump administration is winning this battle and the Wall Street wing is in favour of the status quo in terms of US trade policy,” Ms Lee said.

In retrospect, those who said Trump will ultimately do Wall Street's bidding, may have been correct all along.

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NugginFuts's picture


City_Of_Champyinz's picture

LOL, funny how that shit never happened to Obama, huh?

FrozenGoodz's picture

Just want to confirm ... Oval Office is short for Swamp?

Jim Sampson's picture

Wall Street will win.  What a joke.

TeamDepends's picture

Was it over when the Khazarians bombed Pearl Harbor?

Akzed's picture

Huh?! Kim? Kourtney? Which one?!

froze25's picture

Count nothing out. Kim is the one that like anal right?

cheka's picture

trump better do the import tariff.  that was THE key to his victories in the midwest states

this battle is nyc.skype vs everybody that works for a living.  tariff or continue to get bled out by the parasites

Pinto Currency's picture

Each manufacturing job generates 1.3 spin-off jobs - the highest of any job classification.

Generation of manufacturing jobs have an out-sized effect on the health of the economy.

And when you compete against countries without labor laws or environmental penalty on a free trade basis, it is very difficult to maintain your manufacturing base - and all those associated jobs.

flicker life's picture
flicker life (not verified) Pinto Currency Mar 11, 2017 7:04 AM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

bigkahuna's picture

Trump brought the vampire squid in, now he can either live with it - or learn his lesson and fire it.

If he really cares about what he said to us while running for prez - he would angrily fire it in public - like Andrew Jackson.

Oldwood's picture

I have no doubt that anything that might actually fix anything will initially come at a cost to our economy. That is the nature of fighting corruption, and I'm sure Trump is calculating how much political "capital" he had to spend.

Escrava Isaura's picture

Article: persistent US trade deficit "would put US national security in jeopardy"

Is this statement true for the US? Or, it’s just political opportunism?

So, let’s put if for a test. Then, you make the decision.

John Cowan:  Yes. And no. It depends who you are.

You can run a 100% trade deficit with your supermarket (you buy bananas from them, they buy nothing from you) safely because they price their goods in local currency and you have local currency to pay them. No positive feedback loops on the value of the currency, no problem.

If you are a poor state in a federation, you can run trade deficits with the rich states indefinitely, again because there is a currency union, and there is also a federal government that keeps up a perpetual transfer from the rich states to the poor ones. Internally the U.S. is in this position. The EU is suffering because it has the currency union, but the rich states won’t allow the perpetual transfer, even though they’d be better off if they did. New York does benefit from being in a perpetual customs and currency union with Mississippi, though not as much as Mississippi does.

If you are Top Nation (the U.S. now, the UK before that), you can run a trade deficit with the whole world, because everyone will accept your money. Why? It’s strong, stable, and everyone already accepts it. This is a positive feedback loop that helps you. During its period of hegemony, the UK was able to sell bonds that paid 3% per annum with a repayment date of never. They were called “three percents” or “consols”.

IF YOU ARE NOT TOP NATION, long-running trade deficits are dangerous, because your currency inflates as a result of them. If you import too many bananas that you have to pay for in zlotniks, you need to buy zlotniks for the purpose with your local currency, whose value consequently goes down against the zlotnik. That can be useful for a while, but in the long run it’s financial suicide. It’s not a matter of passports being different, but of currencies being different.



Nexus789's picture

You are competing on a financial basis in terms of cost arbritage and not on technology and the creation of competitive products like some nations. Those nations will dominate trade and maintain living standards.  The US economy will self destruct if it continues on its current finance centric path. 

caconhma's picture

It is vital to have good and high-paying jobs, not just jobs. 

smithcreek's picture

A president that gets both sides of an issue in the same room and listens to both??!?!?!!  Horrible!  Quick, get Obama back, he never had to think about how to deal with issues, his leftist ideology made every decision easy-peasy.

William Dorritt's picture

Primary high value add Generates 4-5 other jobs

Theosebes Goodfellow's picture

~"Huh?! Kim? Kourtney? Which one?!"~

Don't stop him, he's on a roll..."

~"...pro-trade moderates..."~

How's that for a euphemism for "Wall Street Globalist"?

You knew this was coming. Bannon is fighting the vampire squid and he'd better start treating them like he did the leftists he and Briebart fought. Oh, and get a food taster, Steve. You're going to need one.

Thought Processor's picture


"Was it over when the Khazarians bombed Pearl Harbor?"



Wait, I thought it was the Germans..........



Akzed's picture

It ain't over till the fat lady sweats.

detached.amusement's picture

It might as well have personally been FDR and the assholes that purposefully allowed old boats and young sailors to be sacrificed

samiam6's picture

of course they're winning. they're playing both sides.

GUS100CORRINA's picture

I want to suggest something that is a TRUTH throughout 6000 years of human history.


BarkingCat's picture

Too bad that is bullshit. Armies crossed borders regardless of trade.


Nick13_ro's picture

Except its not. You either have free trade or you have such things as the scramble for Africa to secure resources. If you dont have a competitive economy because of protectionism the only alternative to accepting a lower standard of living (if anybody will even buy your crap even at lower prices) is to invade resource rich countries and force them to supply you with their raw materials on favorable terms.

Gold...Bitches's picture

Jesus the number of idiots on ZH these days is astounding.  So all wars throughout history were nothing other than disputes over free trade?  Otherwise please tell me the percent of wars that were attributed to this.  Was it 100%, 75%, 50%, or just BS?

NidStyles's picture

Except we were selling oil and fuel to Germany even after we declared war with them.


We were also granting and gifting money resources, technology and fuels to the USSR during the duration of the Cold War. Same with this war against ISIS, we are supplying them with funds and munitions still to this day through CIA conduits.


Didn't any of you read the Vault 7 materials?

bigkahuna's picture

You are right - they do not even have to read V7 to know that the CIA was running guns and such to isis - that came out even in the Lame stream media when the USG as openly supplying arms to "moderate rebels". - just another one of DCs good ideas...

drain the swamp

crazzziecanuck's picture

The largest export desitination of pre-WWI Germany just before the war was the British Empire.

Wars happen irregardless of trade or not.  Wars are fought by elites with egos and a murderous certitude that they have the right to impose their will upon everyone else by force.

Oldwood's picture

Our version of free trade simy enriches a very few and some of that wealth trickles down, but eventually the bulk of that wealth concentrated in the hands of a few. If a population is deprived of a means of EARNING it eventually dies, regardless of how cheap the imports are. Competitors like China are not looking for fairness, they are looking for a WIN, where they control ALL production and can dictate their terms. Meanwhile our population is indoctrinated to the entitlement ideology believing we don't need to WORK, that WORK is a dirty word, an activity for losers, the same as those living under a bridge or selling dope on the corner....We won't be a "tool" of the man. Corporations are busily replacing us with machines that fulfill the promise of our entitlement. Do we really think they are doing it out if love.... for us?

Withdrawn Sanction's picture

"When goods no longer cross borders, armies do."

Canard, often repeated.  Goods freely transited state borders in the US in 1860, and we know how that ended up. 

It's right up there w/an integrated, federalized Europe will prevent future wars.  

Leave it to those seeking a simplistic, mono-causal explanation of history to draw exactly the wrong lessons from it.  ....or maybe the canards are designed to hide something more sinister. 


NidStyles's picture

Well, that canard in particular did come from Murray Rothbard...


He was a deeply Zionist Jew. He was anti-State in all regards, except for when it came to Israel. Obvious agenda is obvious.

All Risk No Reward's picture

I logged in just for you and people like you.  You do realize that free trade is NOT defined by the name "free trade," right?

What is sold to you as "free trade" is actually economic warfare on you, your family, and your community.

Let me help you out...  The BIG BAD is an international banking cartel (IBC) that is operating the Debt Star, a neutron bomb version of the Death Star operated in Star Wars.

The mechanics of this system works as follows (it is simple, so follow along.  If you can't grasp it, ask a middle schooler for help.  Seriously.  He or she will help you):

If the IBC lends you $20 (or billion or trillion, it doesn't matter) @ 5% interest, in one year you will owe them $21 due to double-entry bookkeeping adjustments that add $1 interest liability to your balance shee and $1 intrerest asset to the IBC's balance sheet.  In one year, you will have $20 available, but you will owe $21, and the IBC controls the $1 you need to pay them back (and not lose your home, your car, your national park, your roads, your energy company, etc. ad nauseum.

That's the low level basic view of the situation.

The higher level view is that you live in a Debt-Money Monopolist Mega-Corporate Fascist Empire system, NOT in whatever else you imagine based off the perception management propaganda that has been deployed against you.  Read that name again as I've never heard a more concise accurate description.

Slavery by force was determined to require too much effort and was dangerous (cue French Revolution).  Therefore, the oligarchs decided to enslave the masse by abstraction - an abstract debt-money system covered with various veneers of propaganda.

Even the libertarians are fooled.

I dare you to try and find an establishment libertarian who describes debt-money systems as accurately as I have above.  The masses ofl libertarians just follow their pied piper.  Of course, there are exceptions, but they serve to prove the rule.

Up your game and stop parroting the download from the Debt-Money Monopolist Mega-Corporate Fascists.

And, yes, the Judas Goebbel types at the top know how the debt-money system works and they lie to their readers. 

Here is a video of Lietaer exposing Paul Krugman's warning him to shut up about the money system...

Krugman to Lietaer: "Never touch the money system!"

~Paul Krugman

Have some dignity.  Don't fall for the Debt-Money Monopolist Mega-Corporate Fascist Empire lies.

The Traitor Is the Plague

MoreFreedom's picture

Hey "All Risk No Reward" your borrowing example has nothing to do with trade. In fact you don't even show an example of trade in your post.

I will agree with you, that borrowing without a plan to invest that borrowed money in producing value, at a rate higher than the interest rate you are charged, will bankrupt you. But that's a lesson about lending and borrowing, not about trade.

All Risk No Reward's picture

Hi MoreFreedom,

Before we get on to the trade issue, you have a fundamental misunderstanding of the nature of date-based monetary systems.  Assets equal liabilities.  Period.  That's why they call it a balance sheet.  Reread the $20 example above.  There is no money to earn a "higher return" unless the Debt-Money Monopolists allow for it by making their money available.

In a nutshell, one person's net monetary wealth is, BY DEFINITION, everyone else's INEXTINGUISHABLE DEBT.  The following video illustrates this very simple concept quite well...

Consequences of Fractional Reserve Banking 2 Poverty Debt is not a choice

Every new dollar created that is available for you to earn has an interest bearing debt attached to it that works exactly the $20 example given above. Thwere is no debt-free money (specie being the exception, but it is minor and is probably used to simply backfill lost federal reserve (debt- )notes.

Now, envision a hoard of net positive money controlled by the Debt-Money Monopolists and their Mega-Corporate Fronts and realize that their net monetary wealth, measured in the multople trillions, is BY DICTATED AND ARBITRARY DEFINITION, the inextinguishable debt of everyone outside the Debt-Money Monopolist Mega-Corporate system.

Money doesn't grow on trees.  Nor is it issued as in the game Monopoly.  Nor does it ooze out of the ether.

It is created through the issuance of debt instruments, meaning more is always owed to the lender than is borrowed.  Yes, certain actors can do well, BUT SOCIETY CAN NOT because is a zero-sum game.

"If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."
by: Robert Hemphill, Credit Manager of Federal Reserve Bank, Atlanta, Ga.
Source: In the foreword to a book by Irving Fisher, entitled 100% Money (1935)

Yes, the system works for most people as long as debt-money is exponentially created.  What happens when the exponential debt-money growth function stops growing, as we know all exponentially growing systems must stop at some point?

The answer is total Main Street collapse.  And no, the government isn't stupid, and even if they were, THEIR FINANCIERS ARE NOT.  That's why they rule the world and most people are clueless to that fact.  The debt is there for a reason - to asset strip society and transfer ownership of society's assets to the Debt-Money Monopolists Mega-Corporate Fronts.  Debt-Money Monopolist financed Big Government will be used to facilitate this asset stripping operation.

What I've just describe, which is what is empirically discernable, is called Economic Warfare.

Sun Tzu said, "all war is deception."  "They best warriors never have to fight."  Someone is waging Art of War on you, yours, and your community.  I'm sounding the alarm.

Do we agree that trade occurs within a context? 

Do we agree that money provides significant context to trade?

If so, then isn't the agenda and the control of the private individuals who defined money creation and its issuance into society something that is important to how "trade" is manifested?

I think so.  How could it not be.

Given that context, the concept of "free trade," which isn't free, has been financed and unopposed by the Debt-Money Monopolists.  In other words, the very people who are using a fraudulent debt-money system to wage economic warfare on you, your community, and your children are promoting the exploitation of dictator controlled slave labor and environmental hell as "free trade."

It isn't.

But the real question of trade is why we have to trade national poverty in order to rent our money supply from a private criminal international banking cartel that finances the Mega-Corporations, that finances Mega-Government, that finances the Democratic Party, that finances the Republican Party, that financed $2 billion in free media for Trump, that finances the Mega-Media, that finances...  well, everything BIG.

Do you think that it is "free trade" to enslave a country through debt-money fraud, and it is a prima facie fraud, and then offshore its industry to dictator controlled slave labor camps with effectively no environmental regulations?

I don't.  I think it is a mistake to ASSUME a false "free trade" strawman into existence and then to talk about it as though it is real.  I prefer to define trerms first.  Until we can agree on terms, we can't really have a productive conversation.

Most people simply parrot the Debt-Money Monopolist "free trade" propaganda - they've bought the lie that is being used to wage war against their own self interests.

Belrev's picture

Sean Spicer jsut confirmed that there is Deep State after 8 years of Obama


Twee Surgeon's picture

Did you see the Upside down US flag thing ? https://twitter.com/eyokley/status/840272699712778241

A longstanding nautical distress signal.

RevIdahoSpud3's picture

I flew the flag upside down for a couple years early on in the obongo admin. I quit flying it altogether the last few years. I'm thinking that whatever country I lived in I would not be inclined to fly anybody's flag. In my cynicism it has all boiled down to a group think thing. It just represents that the munchkens are all marching in line according to some asshole elites wishes.

sessinpo's picture

Not being totallly truthful. The deep state was there long before obama. The deep state is on both sides and is about controlling as much of the budget as possible.

A. Boaty's picture

Not during a (D) administration. Then Oval Office = Endangered Wetland.

Sebastion's picture

You mean the Billionaire president and his Billionaire cabinet who got rich off the system arent really going to change it?

Wow shocker.  Those that voted for Trump feel like idiots and I feel for them.

TeamDepends's picture

Give 'em hell President Trump, and if they give you any lip point over your shoulder at Ol' Hickory Jackson.

Thought Processor's picture



Dear god I hope all of this is being recorded in there.  


And yes, hopefully Andrew Jackson's ghost is hovering above it all as well.  We need all the help we can get.

Mikeyy's picture

Exactly  - it's all Obama's fault that Trump is gonna back slide on all his protectionist policies after appointing the vampire squid to run his economics team.  


HRClinton's picture

Beware Republicans and Libertarians! 

Trump talks like a libertarian nationalist, but he walks like a Wall St and MIC guy.

Let me guess:  in the Globalist camp are the Goldmanites, i.e. Cohn and Mnuchin. You could not see this coming?

Watch what he DOES, not what he SAYS.

crazzziecanuck's picture

Democrats campaign from the Left and rule from the Right.  HRC is an excellent example of that.  Obama was too.  We got tax cuts for the rich, an expanded surveillence state, more wars, a right-wing health care plan, more and more Pentagon spending, failure to prosecute white collar crime, and so on.  Obama was literally a moderate Republican.  Obama even signalled his willingness to cut entitlements as part of slaying the budget deficit, an act for which even the GOP could never accomplish.  That sound like a Marxist to you?

Trump is nothing special at all despite all the crazed hysterics by the corporate Democrats.

Oldwood's picture

The notion of Democrats and Republicans is past. This is a battle of freedom versus tyranny. Everything else is chaos inducing divisive bullshit. The "cure" is full transparency. People MUST see what is truly in their best interests.