“Well, where were you four years ago?” Gary Cohn asked jokingly when the subject of the ineffectiveness of tariffs came up, suggesting he could have used the support during his time as economic adviser to Donald Trump.
Cohn very publicly during his time at the White House spoke out against tariffs and did so again this week in a keynote delivered during the TPM22 Conference in Long Beach, Calif. where he talked trade policy and his sparring with former Trump trade adviser Peter Navarro.
“There was clearly contention in the White House on trade,” Cohn said of his time as an adviser. “I think a lot of what was reported [between Cohn and Navarro] was fairly accurate. I think you can clearly say that Peter Navarro and myself have diametrical views on trade, what it means for our economy and what it means for our economic prosperity. And we were pretty animated in our views and we did not hold back. And we allowed the president to know our opinions and allowed the president to know our opinions in a very forceful manner.”
Cohn, who currently serves as vice chair of IBM and is the former president and COO of Goldman Sachs, served as director of the National Economic Council from 2017 to 2018. He resigned from his post in 2018 after the administration’s decision to roll out tariffs on steel and aluminum imports.
Cohn went on to say at TPM he attempted to argue the point to Trump that tariffs on imports are the equivalent of a consumption tax that would ultimately hit lower-income consumers the hardest. He called consideration of rolling back the gas tax ironic given it goes toward infrastructure spending and, instead suggested import taxes be rolled back.
“If you go back and look at traditional history—and I’m not sure we have traditional history anymore in the Congress or in the White House—traditionally the Democrats were somewhat anti-trade to some extent. The Democrats thought they were protecting union jobs in the United States. So, the Biden position [on trade], in some respects, based on history is somewhat more defendable than the Trump position,” Cohn said.
Trump turned the concept on its head, he said, arguing points Democrats would have typically used.
“He talked about countries stealing our high-paying jobs and taking things offshore and needing to return great, high-paying jobs back to American soil and, therefore, if I put a tariff on certain goods, I will miraculously return jobs back to the United States. I think everyone in this room knows none of that happened,” Cohn said.
Inflation facing Americans is not solely the result of tariffs, although they haven’t helped, he went on to say.
“The confluence of events that really got us to the situation that we’re in now was when we shut down the U.S. economy and we told people to go home for the greater good of the country, which was clearly the right thing to do for some period of time,” he said.
The issue with the prolonged shutdown was consumers spending all of their disposable income on goods and none on services, with dollars going toward experiences such as restaurants, the movies and travel coming to a halt.
That said, the spending on home renovations and home offices are one-time expenses, Cohn said, pointing out dishwashers and other appliances that are currently on backorder due to the supply chain challenges will not be forever.
“This natural demand cycle will clean itself up. It’s not going to happen any time soon, but this demand-driven cycle will clean itself up,” he said.
Cohn was also asked for his thoughts on international current events, starting with the war in Ukraine.
“We’ve now seen the entire European continent and community unite for the first time in a very long time,” he said. “There’s been some really extraordinary events that no one would have predicted a few weeks ago in this situation.”
Cohn met Vladimir Putin at the G20 summit while he was still an adviser to Trump and said there’s little surprising about the Russian president.
“I think the Putin that we see on TV and the Putin we see delivering these speeches in these rooms in Moscow, in these big ornate rooms with him sitting at his little desk with his staff or whoever they are on the other side of the room and him dictating the moment, it was very much like that I guess almost five years ago at the G20,” Cohn recalled. “He comes in with a very small staff and he’s 100 percent in control of the meeting—what is said, what is not said and the topics that are around the table.”
“The Chinese are clearly watching what’s going on in the world,” he said. “I think the fact that we have seen such unification and we’ve seen a real outburst going on in Russia in the latter few days that we didn’t see in the first couple days I think is very helpful for all of us, and I’m sure the Chinese are registering that.”