Don’t expect Steven Mnuchin to be the new voice inside the Trump administration questioning where economic policies are going. Whereas Cohn sometimes brashly challenged the president behind closed doors, Mnuchin has proved more inclined to get along.
Steven Mnuchin will not be the new Gary Cohn.
The Treasury secretary this past week laid to rest any hope among Wall Streeters that he’ll backstop the departing economic adviser in battling the administration’s ascendant protectionists. Cohn announced his resignation Tuesday after refusing privately to endorse President Donald Trump’s global tariffs on steel and aluminum imports. On Wednesday, Mnuchin continued a series of public appearances to defend them.
Mnuchin and Cohn are often discussed as a pair — Larry Kudlow, an outside economic adviser to Trump named as a possible Cohn successor, this week described them as the “two pillars” of the president’s fiscal team — and it’s easy to see why: They’re both Goldman Sachs alums with Democratic leanings making their first forays into public service for a president who ran against what they exemplify.
But whereas Cohn sometimes brashly challenged the president behind closed doors, Mnuchin has proved more inclined to get along. Of the proposed tariffs denounced by economists at Goldman Sachs and beyond, as well as by an array of CEOs and congressional Republicans, Mnuchin told Fox Business News in a Wednesday interview: “It’s just part of the overall economic plan. So we’re comfortable with the economic impact, and we’re going to be careful.”
Most Read Business Stories
- Work-from-home benefits could stir up new battles between workers and their bosses
- Boeing’s turnaround threatened by talent exodus to companies like Amazon, SpaceX
- Breaking up with Venmo: The best payment apps for privacy and low fees
- Bezos offers to waive $2 billion of fees in moon-mission bid
- What’s the price of an uncleaned hotel room?
The president is “not afraid to get into a trade war, although that’s not what we want,” Mnuchin said. “Let’s be very clear. We’re not looking to get into trade wars.” He said it won’t derail the administration’s aim of achieving 3 percent economic growth.
The White House offered temporary exemptions from the global levies to Canada and Mexico, saying that could be extended pending progress on NAFTA talks.
Late last year, as trade hawks in the administration started pressing their case for imposing punishing tariffs, Mnuchin reportedly joined Cohn in arguing to Trump the move could spook investors and sap momentum from the tax cuts.
But Mnuchin evidently didn’t press the point as far as Cohn — an echo of how the two men diverged over Trump’s equivocating after the white-supremacist violence in Charlottesville last August. Cohn has received a fresh heaping of scorn from critics this week for drawing his line, finally, at tariffs, rather than quitting back then.
But while Mnuchin defended Trump, Cohn drafted a resignation letter and publicly criticized Trump, probably tanking his shot at chairing the Fed. “Gary’s been a terrific partner,” Mnuchin told Bloomberg’s Kevin Cirilli in a Wednesday interview. “Gary was very important in many things that we did here. But there’s a big economic team here.”
The difference between Trump’s two senior economic advisers helps explain the alarm in GOP and corporate circles with Cohn’s exit: He’s a sui generis figure on the team because of his willingness to mix it up with Trump. Some of that owes to his position.
“Unlike Cabinet agencies such as the Treasury Department or the Office of Management and Budget, the NEC (National Economic Council) has no formal responsibility for carrying out legislation or regulations,” The Wall Street Journal’s Nick Timiraos writes. “The policymaking body has little authority beyond whatever power the president places in it.”
But in a norm-shredding presidency, the only reason others haven’t more regularly followed Cohn’s lead is that Trump doesn’t want to be challenged.
Anticipating the announcement of Cohn’s exit, Trump told reporters he likes to foster debate among his advisers. “I like conflict,” he said. “I like having two people with different points of view, and I certainly have that. And then I make a decision. But I like watching it. I like seeing it. And I think it’s the best way to go.”
Contrary to that Team-of-Rivals sentiment, the record suggests Trump’s team features ideological diversity mainly by accident. What the president prizes above all is loyalty. And in thorny policy debates, the president frequently seeks confirmation of the decision he’s already reached by instinct rather than working toward a conclusion informed by weighing competing equities.
That dynamic has been played out again over the last week on tariffs. Last Thursday morning, “Trump had a meeting with top economic advisers, including Cohn and … Mnuchin,” The Post’s Damian Paletta and Josh Dawsey wrote last week. “Cohn warned against the tariffs, and a number of White House advisers came away from it believing that a decision had been postponed and that Trump’s meeting with steel and aluminum executives would amount to little more than another gathering of CEOs at the White House … But that all changed around noon. Trump unexpectedly summoned reporters into the Cabinet Room for his meeting with the executives. Senior White House officials did not want reporters to attend the meeting, for fear of Trump announcing tariffs, but the president made an impromptu call to bring in the media and proceeded to announce his trade crackdown.”
Before he quit this week, Cohn had been trying to arrange a Thursday meeting for Trump to hear from business leaders opposed to the higher metals prices and barriers to their exports — a cohort that economists agree is much larger than the steel and aluminum interests that stand to benefit. The president blocked it.
Instead, he rolled out the tariffs at a White House event that featured steel and aluminum workers.
Trump’s trade advisers are already well acquainted with the industry: Commerce Secretary Wilbur Ross made a killing investing in steel companies; Gil Kaplan, Trump’s pick to serve as undersecretary for international trade at Commerce, is a former steel-industry lobbyist; U.S. Trade Representative Robert Lighthizer represented U.S. Steel in a number of trade disputes as a lawyer in private practice before joining the administration, as did his general counsel, chief of staff, and deputy chief of staff, all of whom worked at the same firm.
Meanwhile, inside the West Wing, Cohn’s departure is stoking fears of an even faster staff exodus. “Multiple aides who are considering departing, all speaking on condition of anonymity to discuss internal matters, said they didn’t have a clue about whom the administration could find to fill their roles. They said their desire to be team players has kept them on the job longer than planned,” AP’s Zeke Miller and Jonathan Lemire report. “A number of other aides have expressed worry about the legal implications — and steep bills — they could face if ensnared in Mueller’s probe. It has had a chilling effect on an already sluggish White House hiring process, according to officials, and there is wide concern that working for Trump could negatively affect career prospects.”
Indeed, Ivan Adler, a D.C. headhunter, said that though administration aides with deep policy expertise are still in demand, the miasma hanging over the White House is making it difficult for some to find their next gig. “Due to the degree that this administration is being investigated by special prosecutors, by the media, by congressional committees, it’s amped up the perception of a reputational risk,” he said. “There hasn’t been this much negative reaction to people in the administration since Nixon.”