Last week’s announcement that the US would levy tariffs on steel and aluminium imports raised numerous concerns, ranging from fears of a global trade war to how the decision would impact industries. But among the concerns, the departure of Senior Economic Adviser Gary Cohn should raise the greatest red flag. Cohn, one of the leading voices against protectionism in the White House, resigned last week, shortly after the announcement on tariffs. Cohn gave no explanation for his leaving, but the timing makes it clear his departure was in protest against the tariffs.
Cohn was called a sane voice in a chaotic White House. His departure leaves Wilbur Ross, US Secretary of Commerce, and Peter Navarro, White House trade adviser, both of who are stubborn “America First” supporters who pushed for the current tariffs, as the leading voices on economic policy. Ross hit the media circuit the day the tariffs were announced and tried to convince Americans they were good for the country as both soup and beverages, packaged in aluminium cans, would now be cheaper. Ross’ comments show a lack of knowledge of economics, trade and concern for the health of the average American. This is the man who will now be deciding which countries will now receive exemptions from the new tariffs. Navarro is an ever greater concern, as many fear he will lead the US into a trade war with China, who he has often labelled a major threat to the US. China is far from his only target, as he is also an opponent of the North American Free Trade Agreement (Nafta) and the free trade agreement with South Korea.
Many assume Navarro will now replace Cohn as the head of the president’s economic council. It is clear that both men have no regard for free trade. Rather than compete, they want the global economy stacked in their favour, and believe tariffs will help. These tactics have been tried before, and they failed, helping to contribute to the Great Depression.
Free trade is essential for economic growth, a position held by the International Monetary Fund, the World Trade Organisation, and the World Bank and, until Trump’s election, the G20. It has been a core component of global growth since the Second World War. It should still be the basis for trade today. That Trump is now listening to these men who clearly stand against free trade needs to be a wake-up call for the rest of the world.
