Former White House chief economic advisor Gary Cohn has lashed out at Peter Navarro and Wilbur Ross, the two men chiefly responsible for the shambles that is Trump's trade policy.
An economist derided by his peers as a "charlatan" and "oddball," Navarro is Director of Trade and Industrial Policy and Director of the White House National Trade Council. Ross is the Secretary of Commerce. Together, both men were responsible for the isolationist and protectionist America First trade policy based on the mistaken notion that trade deficits are in and of themselves bad.
The Navarro-Ross plan was savaged by one economist as "based on assumptions so unrealistic that they seem to have come from a different planet. If the United States really did adopt Trump's plan, the result would be an immediate and unmitigated disaster."
Cohn, director of the National Economic Council under President Donald Trump, has confirmed this disaster. He said the U.S. is losing the trade war as Trump pursues a strategy based on isolationism and protectionism that hasn't worked.
Cohn specifically pointed his finger at Navarro and Ross for drawing the country into a misdirected tariff battle against the world.
"Tariffs don't work," Cohn affirmed.
"If anything, they hurt the economy because if you're a typical American worker, you have a finite amount of income to spend. If you have to spend more on the necessity products that you need to live.
He said among economists, Navarro is the "only one in the world" who thinks tariffs work.
"There's only one in the world that we know of" who thinks like this, said Cohn. That one person is Navarro.
Cohn said he fought against the tariffs, a battle he said he was destined to lose given the hold on the president enjoyed by Navarro and Ross.
He said Trump is also losing, as evidenced by the record trade deficits in 2018 with both China and the rest of the world. The U.S. deficit with China was $419.2 billion in 2018, an increase of 11.6 percent. Globally, the deficit was $621 billion, up 12.5 percent year-on-year.
"Did it hurt the Chinese at all?" asked Cohn.
"We had record trade deficits ... The only big open issue right now that he could claim as a big win that he'd hope would have a big impact on the stock market would be a Chinese resolution. Getting the trade deficit down I will never say is easy, but of the issues on the table, that's relatively easier."
He said Trump is in for a tougher time trying to resolve the thorny issues of intellectual theft and forced transfer of technology.
