Tags: larry kudlow | gary cohn | donald trump | peter navarro

Kudlow Declines to Discuss Idea of Replacing Cohn

Larry Kudlow, the Reagan administration economist who advised the Trump campaign on tax cuts, declined to discuss whether he would join the White House after Gary Cohn quit as the director of the National Economic Council.

"I just don't want to walk through all those scenarios," Kudlow said on cable channel CNBC, where he is a senior contributor. "I don't have any comments on that stuff."

An administration official said Kudlow and White House trade adviser Peter Navarro are the "top two candidates" to replace Cohn, Reuters reported.

Cohn, who was president and chief operating officer of Goldman Sachs before joining the Trump administration last year, didn’t cite the reasons for resignation. However, he was a major proponent of free trade who was said to disagree with President Trump’s plan to slap stiff tariffs on imported steel an aluminum.

Kudlow last week warned that tariffs are a "blunt instrument" that could have adverse effects on U.S. consumers and companies. Kudlow also has said "targeted tariffs" can work as a negotiating ploy that gets the attention of affected parties.

"Across-the-board tariffs like this damage the users of the commodity," Kudlow had said on CNBC. "What are you going to do about cars? All manner of transportation, buses, trucks, SUVs? The energy business. Airplanes, they all use steel."

President Trump has said that the tariffs would affect all imports of the industrial metals, which includes friendly countries like Canada and Mexico. Negotiators for the two countries are currently negotiating with the United States on changes to the 1994 North American Free Trade Agreement.

"I would have started with China,” Kudlow said. "Go after China. Canada is not our enemy."

The Commerce Department said on Wednesday the trade deficit jumped 5 percent to $56.6 billion, the highest level since October 2008. It exceeded economist forecasts of $55.1 billion. Part of the rise in the trade deficit in January reflected increases in prices of commodities like crude oil.

The politically sensitive trade deficit with China jumped 16.7 percent to $36.0 billion, the highest since September 2015. The deficit with Canada soared 65 percent to a three-year high of $3.6 billion.

Trump in late January imposed broad tariffs on imported solar panels and large washing machines. Last week, Trump announced he would slap import tariffs of 25 percent on steel and 10 percent on aluminum to protect domestic producers.

Cohn was said to be one of the more influential advisers to the president, who ran on a pro-business platform of cutting taxes and regulation, boosting jobs growth and spending $1 trillion on infrastructure like roads and bridges.

But Trump also was highly effective at tapping into populist discontent with his pledge to do something about the massive trade deficit that he blamed for sending American jobs and wealth overseas. While factory automation has contributed to job cuts, Trump's message was especially popular among blue-collar workers who never recovered from the 2008 financial crisis. In other words, Trump blamed Wall Street-to-Washington elites, some of whom joined his administration, for the plight of the U.S. worker.

One of Trump’s first actions as president was to withdraw the United States from the 12-nation Trans-Pacific Partnership that was backed by the Obama administration. While campaigning, Trump described the trade agreement as "a rape of our country" by wealthy interests that didn’t care about America’s dying middle class. He also said in interviews and campaign speeches that Japan, China and Mexico had lured businesses away from the U.S. 

This year, Trump said he would re-consider the TPP if the U.S. got a “substantially better deal.” The agreement was intended to show Japan, Australia, New Zealand, Vietnam and other Pacific countries that the U.S. would strengthen ties with a region strained by China’s growing economic and military assertiveness.

Many Republicans have said they oppose Trump's tariffs plan, such as Sen. Lindsay Graham (R-S.C.), who said, "Please reconsider. You're making a huge mistake."

But conservative commentator Pat Buchanan supports the president, saying that the U.S. needs to correct the $800 billion trade deficit with other countries.

"If we are to turn our $800 billion trade deficit in goods into an $800 billion surplus, and stop the looting of America's industrial base and the gutting of our cities and towns, sacrifices will have to be made," Buchanan said this week an in op-ed. "But if we are not up to it, we will lose our independence, as the countries of the EU have lost theirs. Specifically, we need to shift taxes off goods produced in the USA, and impose taxes on goods imported into the USA."

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Larry Kudlow, the Reagan administration economist who advised the Trump campaign on tax cuts, declined to discuss whether he would join the White House after Gary Cohn quit as the director of the National Economic Council.
larry kudlow, gary cohn, donald trump, peter navarro
Wednesday, 07 March 2018 11:35 AM
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