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Gary Cohn May Resign If Last-Ditch Push To Kill Steel, Aluminum Tariffs Fails

Courtesy of Zero Hedge

Despite repeated denials from the pro-tariff wing of White House advisers (a triumvirate that includes Commerce Secretary Wilbur Ross, trade adviser Peter Navarro and trade representative Robert Lighthizer), media reports about Gary Cohn's impending departure from the White House have just kept coming.

And for its latest installment in the ongoing "will Gary stay, or will Gary go" saga, Bloomberg reports that Cohn is making a last-ditch effort to dissuade his boss from imposing steep and controversial tariffs on steel and aluminum by inviting executives from US firms that would be adversely affected by the tariffs…

Cohn

…And, Bloomberg adds, if this last ditch effort fails, Cohn might follow this crowd of angry executives out the front gate…

A Trump order to impose the tariffs would be a huge setback for Cohn, who has vigorously opposed the move, citing concerns that it would harm the economy. This decision is viewed inside the White House as a possible breaking point for Cohn, a former senior executive at Goldman Sachs Group Inc., and some insiders believe he will depart if Trump doesn’t take his advice on the issue.

Trump advisers who favor the tariffs want him to sign the paperwork while in Pennsylvania steel country on Saturday, but the signing location has not yet been decided, according to two people familiar with the location discussion.

Of course, Cohn isn't alone in pushing back against the tariffs. Republicans in Congress, led by Speaker Paul Ryan, have launched a campaign to stop Trump from imposing the trade wars. The European Union is threatening to impose reciprocal tariffs on US goods produced in Republican controlled states – an outcome meant to ratchet up pressure on Trump's fellow Republicans.

Ryan told reporters earlier this week that he and other Republicans in Congress are "extremely worried" about this plan, and are "urging the White House to not advance with this plan." In response, Trump insisted that he's not backing down; indeed, it'd be politically difficult to give up on the tariffs, especially since he listened to the emotional pleas of steel and aluminum executives last week. The European Commission, lead by Jean-Claude Juncker, is threatening to impose reciprocal tariffs on certain goods manufactured in Republican states.

Trump's aides have urged him to unveil the tariffs in beautiful Steel City Pittsburgh. The visit would come days before a House special election in the heart of America's steel country.

The candidate, Republican Rick Saccone, who is seeking to fill the seat of fellow Republican Tim Murphy – the Congressman who resigned in October after revelations he suggested that his mistress seek an abortion – has struggled against Democratic challenger Connor Lamb.

The district formerly represented by Murphy includes some 17,000 voters who are either steelworkers or related to them, the AFL-CIO told the Pittsburgh Post-Gazette.

But Trump must balance placating his base of down-and-out manufacturing workers with other considerations, like doing everything he can to support the US economy and financial markets.

Trump wants to protect industries that are “the backbone of this country” and to “make sure we’re doing everything we can to protect American workers,” said White House spokeswoman Sarah Huckabee Sanders at a Monday briefing for reporters.

Trump is reportedly expected to formally impose the tariffs later this week – or early next week.

As analysts at Citi pointed out, Trump has said he "still ha[s] some people that I want to change" – an obvious red flag that could signal that he is willing to back away from his tariff push.

One thing's for sure: With markets moving higher this week, it's possible investors won't fully price in the tariffs until they've been signed into law.


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