Former White House chief economic advisor Gary Cohn, who quit in a huff over Trump's tariffs on steel and aluminum, has lashed out at some of his former colleagues in a Wednesday interview with Freakonomics Radio.
Cohn slammed National Trade Council director Peter Navarro and Commerce Secretary Wilbur Ross for leading the country into an unnecessary trade war.
"Tariffs don't work. If anything, they hurt the economy because if you're a typical American worker, you have a finite amount of income to spend," the former Goldman Sachs #2 executive told host Stephen J. Dubner. "If you have to spend more on the necessity products that you need to live, you have less to spend on the services that you want to buy."
When interviewer Stephen J. Dubner suggests that all other economists except for one — Navarro — would agree on that point, Cohn said, "There's only one in the world. That we know of." -CNBC
Cohn revealed that a tipping point for him leaving the White House was a secret meeting set up by Navarro and Ross with the heads of the steel and aluminum industry to let them know the Trump administration was about to levy tariffs on imports of the metals.
"What happened in the White House is we got to a point, unfortunately, where one or two people decided that they were going to no longer be part of a process and a debate," added Cohn.
When asked if Ross and Navarro arranged the meeting, Cohn said, "Yes. Those are the two people. When the process breaks down, then you're, sort of, in my mind, living in chaos. I don't want to live in a chaotic organization."
Cohn fought a losing battle against the tariffs - but said that Trump is also losing - pointing to the record trade deficits in 2018 with China and the rest of the world.
The U.S. shortfall with China was $419.2 billion for the year, an increase of 11.6 percent. Globally, the deficit was $621 billion, up 12.5 percent year over year. -CNBC
"Did it hurt the Chinese at all? We had record trade deficits," said Cohn. "The president needs a win. The only big open issue right now that he could claim as a big win that he'd hope would have a big impact on the stock market would be a Chinese resolution. Getting the trade deficit down I will never say is easy, but of the issues on the table, that's relatively easier."
Cohn did have a kind word or two for Trump - giving him credit for several achievements including a "pretty robust economy," and stock market gains that have held up reasonably well despite a volatile 2018.