All is not placid among the men and women in the Trump administration. A battle is being waged over U.S. economic policy as globalists and economic isolationists duke it out in what one source called “a fiery meeting.”
As CNBC reported, a line has been drawn between the two opposing factions. One, the nationalists, is led by senior Trump advisor Steve Bannon and trade advisor Peter Navarro. The other is headed by Gary Cohn, the former Goldman Sachs executive leading Trump’s National Economic Council.
Navarro has upset American allies in the EU over accusations that Germany has exploited the “grossly undervalued” euro. He has also requested discussions with the Merkel administration in the interest of closing the U.S.’s trade deficit with the EU. And although officials close to the White House have claimed that Navarro’s agenda might be falling to the wayside, President Trump seems to be taking his side.
The conflict between Trump officials prefaces a visit by Angela Merkel, who will be coming to Washington, and also foreshadows a meeting between G20 finance ministers slated for next week in Germany. Fears over economic protectionism are high on the list of concerns for many government officials.
Meanwhile, Trump spokespeople declined to reply to questions regarding the blow-up. A White House spokeswoman told press,
‘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.’
Cohn and his allies have attempted to exploit both the opinions of well-known economists, as well as Navarro’s own comments to keep him in check. Supposedly, this move has triggered pressure to move Mr. Navarro from the White House to the Commerce Department
Cohn has also been a prominent player in negotiations regarding the NAFTA agreement, which concerns both Canada and Mexico.
Following a meeting with several other White House officials, including Mr. Cohn, Mexican foreign minister Luis Videgaray announced that he hoped to finish wrapping up NAFTA talks by the end of 2017. Mr. Ross, on the other hand, called for a more involved discussion that could extend into 2018.
Navarro isn’t making too many friends with his current m.o. at the moment. Senate Republicans criticized him after he allegedly showed up poorly prepared at a briefing held with a group of Senators in February. Sources close to the White House said that Navarro’s agenda has become increasingly isolated from his colleagues. While Cohn adds staff to his team, Navarro has trimmed his group down to a much smaller group operating out of an office adjacent to the president’s home.
Mr. Cohn has recently appointed former diplomat and trade official Andrew Quinn, who acted as a negotiator during Obama’s TPP push. Trump recently pulled the U.S. from the TPP, but has permitted Mr. Quinn to serve as an assistant to the president for international trade issues.
Quinn’s appointment caused news outlet Breitbart.com to explode with rage at the beginning of the month. A story published by the conservative news site labelled Quinn as an “enemy within”. The article claimed:
‘[Mr] Quinn’s support for not just the TPP but for multilateralism, in general, is diametrically opposed to the . . . approach [on trade] that helped Donald Trump get elected.’
However, Quinn’s addition to the Trump staff has been a beneficial diplomatic move on the part of the current administration, allaying the fears of some foreign economic officials that Trump and his staff will pursue agendas that may result in a trade war. Foreign officials who have sought to meet with Mr. Navarro have instead been directed to meet with Mr. Cohn and his staff or Jared Kushner, Mr. Trump’s son-in-law. A European official expressed hopefulness that Mr. Navarro’s influence seemed to be waning in the administration.
‘The situation is less worrying than it was two months ago because [Mr] Navarro seems to be more and more marginalised. His influence seems to be diminishing quickly.’
According to trade official Thea Lee, who recently joined Trump’s manufacturing council and likely to the dismay of many Trump voters who appreciated his campaign rhetoric about economic isolationism, Trump appears to be walking back some of his promises about a new approach to trade. Ms. Lee told press:
‘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.’
Image via Getty/Chip Somodevilla