Toobin: Cohn stomached racism, not tariffs

CNN's chief analyst Jeffrey Toobin says that while Trump's former economic adviser Gary Cohn could "stomach" the President's controversial comments about the Charlottesville protests, he could not handle the idea of tariffs on aluminum and steel.

Posted: Mar 8, 2018 4:17 PM
Updated: Mar 8, 2018 4:17 PM

What Donald Trump clearly cannot see through the prism of his own warped ideology is that the US is so far behind in its trade imbalance with the world that no matter how many tariffs he imposes, the retaliation will only leave it deeper in the hole with a damaged economy.

In short, he is risking kicking off a global trade war.

For trade, unlike Trump's simplistic view, is not a zero-sum game. It's not all about the dollars, it's about jobs. All this flailing effort at rebalancing, imposed in an instant, could take decades to correct. Meanwhile, millions of jobs risk being lost. We may save a few hundred jobs in steel, and lose hundreds of thousands in automobiles, planes and industries critical to our survival.

Gary Cohn, head of the White House Economic Council, clearly recognized this and clearly could not visualize a viable path ahead for the American economy if the President failed to recognize the existential dangers toward which the Trump administration appeared hell-bent on plunging the world.

Now he's gone and it's difficult to see any rational voice counseling restraint that remains between Trump and some economic Armageddon.

Let's look at the logic. America's trade imbalance in goods with the European Union was $151 billion last year ($435 billion in imports, $284 billion in exports.

Now, say Trump imposes a major tariff on steel and aluminum, cutting back on their exports to us, then Europe in turn imposes countervailing tariffs on our exports to them, and Trump retaliates on European automobiles, and they retaliate on American planes (critically damaging Boeing and helping their own Airbus competitor).

Canada, another victim of the Trump tariffs and the largest exporter of steel to the US, would in turn likely go straight for the jugular -- American agriculture, a total of $23 billion. Indeed, some 1.2 million jobs are devoted to exports to Canada.

Brazil, the second largest victim of Trump's steel tariffs, imported $900 million in agricultural products, as well as $4.8 billion in planes. All those exports represented 128,000 American jobs.

What is especially interesting is that all these figures come directly from the Office of the United States Trade Representative. Yet somehow, none of them seem to have made their way to President Trump, or at least made much difference once they arrived.

But there's much more trouble ahead. The rationale underpinning Trump's steel and aluminum tariffs will have set a critical precedent -- the President labeling them as being in defense of "national security."

That's an escape clause in the World Trade Organization charter that is designed to be invoked narrowly and only in the most dire circumstances. Imagine that escape clause being invoked globally and routinely. The broad use of this narrow path through and around the World Trade Organization could (Trump's other big daydream) eviscerate that organization which America has supported from the get-go.

A full-fledged global trade war would quickly and inevitably ensue. And America, its economy, its currency, its stock market would truly be brought to its knees. Of course, so would everyone else's.

This risk did not suddenly appear on the horizon. Last year, the World Trade Organization took up "two trade concerns raised at the 30 June meeting of the Goods Council. The United States said it was investigating the impact of steel and aluminum imports on national security while certain Gulf states cited national security interests in a discussion on their trade restrictions on Qatar."

The European Union warned, then, that this clause could never be invoked "for the purpose of protecting a domestic industry against foreign competition" and warned, back then, of dire consequences including "systemic risks."

At that meeting, in addition to the EU, Brazil, Australia, Taiwan, Japan -- all loyal American allies -- as well as China and Russia, all weighed in against invoking national security.

The world has been there before -- long before the creation of the WTO in 1995 or even its predecessor, the General Agreement on Tariffs and Trade after World War II. All of these were a reaction to the catastrophic American Smoot-Hawley Tariff that in 1930 helped plunge the world into the maelstrom of the Great Depression, compounding the 1929 stock market crash.

Back then, President Herbert Hoover, the Donald Trump of his day, had a trusted economic adviser -- Thomas Lamont, a partner in J.P. Morgan bank (the Goldman Sachs of its day). "I almost went down on my knees to beg Herbert Hoover to veto the asinine Hawley-Smoot Tariff," Lamont later recalled. "That Act intensified nationalism all over the world." Sound familiar?

Many of those defending the President's steel and aluminum tariffs, which are expected to lead to -- among many other effects, including increased inflation -- reply that "a little inflation isn't a bad thing." That we need to defend our ability to produce steel and aluminum at home.

Perhaps. But then there are the lost jobs, dying exports and shuttered factories, fallow farms. For all too often, ill-considered events can quickly spiral into uncontrollable effects that can be reversed only at enormous cost. Hopefully, another adviser to President Trump will emerge, before it is too late, and go down on his knees, and this president will listen.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 710607

Reported Deaths: 13248
CountyCasesDeaths
Marion968581722
Lake51908949
Allen39337672
Hamilton34643406
St. Joseph34306543
Elkhart27477432
Vanderburgh22099394
Tippecanoe21927213
Porter17987301
Johnson17571374
Hendricks16854310
Clark12715190
Madison12367337
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LaPorte11204204
Delaware10382184
Howard9698211
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Warrick7702155
Floyd7568176
Wayne6917198
Grant6855171
Boone6568100
Morgan6414138
Dubois6091117
Marshall5801109
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Cass5698104
Henry5588101
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Jackson494172
Shelby481395
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Gibson429589
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Miami373365
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Steuben367157
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Scott261553
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Washington231631
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Jay186429
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Newton104234
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Martin83115
Warren80215
Switzerland7698
Union70110
Ohio56011
Unassigned0408

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1058395

Reported Deaths: 19033
CountyCasesDeaths
Franklin1229981360
Cuyahoga1080042072
Hamilton785031170
Montgomery50326998
Summit45710915
Lucas40568768
Butler37858572
Stark31586896
Lorain24333473
Warren23964293
Mahoning21029584
Lake20143365
Clermont19480229
Delaware18162130
Licking16185207
Fairfield15796197
Trumbull15666461
Medina14961259
Greene14765236
Clark13697293
Wood12828185
Portage12481196
Allen11374229
Richland11102198
Miami10568214
Muskingum8729127
Wayne8619209
Columbiana8589226
Pickaway8454121
Marion8409135
Tuscarawas8393240
Erie7644154
Hancock6746124
Ross6727146
Ashtabula6563166
Geauga6563146
Scioto6314101
Belmont5657159
Union560247
Lawrence5483102
Jefferson5372149
Huron5333114
Darke5285121
Sandusky5208120
Seneca5163120
Washington5095108
Athens509256
Auglaize477683
Mercer473785
Shelby458092
Knox4418108
Madison426559
Putnam423199
Ashland414488
Fulton411667
Defiance405596
Crawford3894102
Brown387755
Logan375176
Preble372498
Clinton364060
Ottawa359578
Highland348460
Williams330074
Champaign322357
Jackson309351
Guernsey308749
Perry290949
Fayette278448
Morrow277239
Hardin265964
Henry265066
Coshocton261058
Holmes255199
Van Wert239863
Pike234231
Gallia233346
Adams230252
Wyandot228354
Hocking210759
Carroll189747
Paulding169239
Meigs141738
Noble133037
Monroe129041
Morgan107723
Harrison105936
Vinton81614
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