Three months after resigning as the White House’s top economic adviser, Gary Cohn on Thursday broke from President Donald Trump’s talking points, expressing concern about an intensifying trade war and skepticism that the tax cut package will provide big gains in the long term.
“If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt,” Cohn, the former chief operating officer of Goldman Sachs, said in an interview with The Washington Post. “Those are all historic ingredients for an economic slowdown.”
Cohn was referring to a series of tariff threats exchanged between Trump and Chinese President Xi Jinping, as well as escalating tensions with Canada and other G-7 allies.
When asked if the trade war could wipe out much of the benefits of the recently passed tax reform law, Cohn replied, "Yes, it could."
“There’s a of friction in the trading system right now, but ultimately I think the goal the United States wants is clear and ultimately it’s the right, ultimate goal,” said Cohn, the former National Economic Council director, adding, "I don’t know how this totally works out in the end."
Cohn also appeared to rebuke the administration’s decision to ease sanctions on Chinese telecommunications company ZTE. The administration recently rolled out a plan to save the state-controlled ZTE by reversing a seven-year ban on U.S. companies doing business with the Chinese firm, and Cohn singled out Sen. Tom Cotton’s vocal opposition to the executive action.
The Arkansas Republican said on the Senate floor Wednesday that “the only fitting punishment” for ZTE “would be to give them the death penalty and put them out of business” in the U.S.
"I think Sen. Cotton talked about it pretty eloquently yesterday," Cohn said. “Based on what Sen. Cotton said yesterday, I do think we need to stand up and protect our national security."
Cohn also scolded White House trade adviser Peter Navarro for saying Canadian Prime Minister Justin Trudeau deserved a "special place in hell" following Trump’s rocky appearance at this week’s G-7 summit.
“Inappropriate and uncalled for. And it’s not his job,” Cohn remarked, expressing less strident disapproval for Trump’s tweet earlier this month about the May employment report more than an hour before the job numbers were made public.
“Anything that deals with the integrity of the market troubles me,” Cohn said. “We should abide by the rules, and the integrity of the system really matters."