Currencies and stocks around the world have been fluctuating after Gary Cohn resigned from the White House on Wednesday
Gary Cohn, the top economic advisor to President Trump and a proponent of free trade, announced his resignation on Wednesday, sending jitters through the stock market.
Cohn, who was previously an executive at Goldman Sachs, had gained traction in the media recently due to his role in overseeing tax reforms, as well as for pushing for a rewrite of financial markets regulation. During his 14-month stint in the White House, Cohn acted as an adversary to the anti-free trade policies of the Trump Administration that have become increasingly apparent as of late, due to the President announcing plans to impose tariffs on US steel and aluminum imports.
As such, many spectators believe that Cohn’s shock resignation is an act of protest against these potential import tariffs. What’s more, with free trade skeptics already gearing up to take his place in the White House, it seems as if markets are already anticipating the risky consequences of Cohn exiting his post.
US stocks were trading down on Wednesday, especially American companies exposed to metal prices and international trade, such as Boeing and General Motors. European stocks were also negatively affected by the news, particularly European automakers that may well be subject to higher costs if a tit-for-tat trade war between Europe and the US ensues.
On the currency front, investors sold off the dollar and flocked to the Japanese yen, as is a regular occurrence when markets perceive up-and-coming risk factors.
Nonetheless, in defense of his plans to introduce import tariffs, Trump argues that the persistent trade deficit in the US has been disadvantaging American manufacturers, and instead of benefitting the foreign enterprise.
Yet import tariffs, should they be introduced, would act as a counterbalancing measure that could eventually level the playing field and push the US economy forward.
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