Republican Civil War Breaks Out Over Trade in Fiery White House Meeting

In a bit of welcome news on the trade front, a possibility exists that Trump’s trade czar, Peter Navarro, is being shoved to the sidelines.

by Mish

At a fiery White House meeting, a Civil War Over Trade erupted with Navarro taking it on the chin.

"A civil war has broken out within the White House over trade, leading to what one official called “a fiery meeting” in the Oval Office pitting economic nationalists close to Donald Trump against pro-trade moderates from Wall Street.

According to more than half a dozen people inside the White House or dealing with it, the bitter fight has set a hardline group including senior adviser Steve Bannon and Trump trade adviser Peter Navarro against a faction led by Gary Cohn, the former Goldman Sachs executive who leads Mr. Trump’s National Economic Council.

At the center of the debate is Mr. Navarro, a firebrand economist who has angered Berlin and other European allies by accusing Germany of exploiting a “grossly undervalued” euro and calling for bilateral discussions with Angela Merkel’s government over ways to reduce the US trade deficit with Europe’s most powerful economy.

The White House declined to answer specific questions about the internecine dispute. In a statement, a spokeswoman said: “Gary Cohn and Peter Navarro are both valued members of the president’s economic team. They are working together to enact the president’s economic agenda, protect American workers and grow American businesses.”

According to people familiar with White House discussions, Mr. Cohn and others have seized on Mr. Navarro’s public comments — and widespread criticism by economists of his stand on trade deficits and other matters — to try and sideline him.

That has led to discussions over moving Mr. Navarro and the new National Trade Council he leads out of the White House and to the Commerce Department, headed by another Wall Street veteran, Wilbur Ross.

Mr. Cohn has also been featuring more prominently in discussions over the renegotiation of the North American Free Trade Agreement with Canada and Mexico, one of Mr. Trump’s top trade priorities.

Mr. Navarro’s case has not been helped by his interactions with Republicans in Congress. He was criticized for being ill-prepared and vague at a closed-door briefing he held with Senators last month to discuss Mr. Trump’s trade agenda and angered some Republicans as a result.

People familiar with the White House battle over trade said that Mr. Navarro, who did not respond to a request for comment, was cutting an increasingly isolated figure in the administration.

He has been operating with a very small staff out of an office in the Old Executive Office Building adjacent to the White House, while Mr. Cohn has been adding staff to his NEC base inside the president’s residence itself."

Excellent News

This is excellent news, assuming the trend continues. The sooner Navarro is gone, the brighter the future of US trade policy will be.

Mike “Mish” Shedlock

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