‘Bye, Gary’

Steve Bannon Gloats, Congress Worries After Gary Cohn’s Surprise Departure

Gary Cohn’s exit from the White House prompted a belly laugh from Steve Bannon, but on the Hill Republicans are bracing for the worst.

Photo Illustration by Elizabeth Brockway/The Daily Beast

On Tuesday evening, Steve Bannon watched with glee as the White House confirmed that his former Trump administration adversary, Gary Cohn, was on his way out the door.

“Couldn’t have happened to a nicer guy,” President Donald Trump’s former chief strategist and current Trump-world exile said in a phone conversation with a close associate who relayed details to The Daily Beast. Bannon, who three sources said was “thrilled” and “elated,” began calling and texting his stateside allies, as he monitored the news from Zurich, one of the stops on his Euro-trip to support hard-right nationalist groups and candidates.

“Bye, Gary,” he said to another friend before letting out a belly laugh. Bannon also made sure to happily message associates images of the globe emoji, a reference to the contemptuous nicknames Bannon allies use for “Globalist Gary.”

On Tuesday night, The New York Times first reported that Cohn, Trump’s top economic adviser, was soon leaving the administration, having found himself on the losing side of a rift over tariffs and trade wars. During his time in the West Wing, Bannon had bitterly feuded with other senior officials such as Cohn and Trump’s son-in-law Jared Kushner, whom he derided as “globalists” trying to thwart a populist-nationalist Trump agenda.

But Trump’s ousted strategist wasn’t the only former White House official to delight in Cohn’s upcoming exit. In a TV interview, Sebastian Gorka, a former Trump adviser and Bannon aide, called the resignation “a victory for the president, not some specific bloc” or faction in the Trump administration.

The “specific bloc” of protectionist advisers that won out this week includes Wilbur Ross, Trump’s commerce secretary, whom The Daily Beast spotted dining with White House senior policy adviser Stephen Miller in the lobby of Trump International Hotel in Washington, D.C., on Tuesday night. This was roughly an hour after The New York Times broke the news Cohn was leaving.

Sources told The Daily Beast on Tuesday that trade factored into Cohn’s decision to leave now, but that Cohn had been planning his departure previously. He wants to return to the private sector, and, after helping to shepherd a tax bill into law, feels that he has left his mark on national economic policy. Cohn’s relationship with Trump was briefly frayed after the adviser was disturbed by the president’s refusal to unequivocally denounce Nazis and white supremacists last year after the murder of a woman in Charlottesville, Virginia.

Cohn reportedly even drafted a resignation letter, but stayed on anyway, opting to smooth over his relationship with Trump. The proposed wide-ranging tariffs, however, ultimately crossed his line.

So far, the White House has not settled on his successor. Among the names on the shortlist to replace Cohn as director of the National Economic Council is Larry Kudlow, a CNBC host and a friend and informal adviser to Trump.

Kudlow is a Wall Street-friendly free market enthusiast Reaganite who’s hosted finance-themed cable news shows since 2005. Peter Navarro, the protectionist White House economic adviser widely credited for helping spur Trump’s coming crackdown on foreign steel and aluminum imports, is reportedly also in the running. Navarro, for his part, has publicly insisted that he is not in contention for the job.

The president is a huge fan of Kudlow, according to sources in and outside of the administration, and the two speak on the phone about politics, policy, and gossip. Stephen Moore, a pro-Trump, conservative economist who has collaborated with Kudlow, plugged his chances in an email to The Daily Beast on Wednesday, calling him “one of the front runners.”

Trump has told people close to him that he is particularly enthused by Kudlow’s apparent understanding that he would have a duty to serve the president, not to advance his own agenda or backbite. Trump, according to these sources, has also specifically commented that he believes Kudlow would not be a “leaker,” if he joined the administration.

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As a source close to both Kudlow and the White House put it, “Larry would shoot dead someone who he caught leaking.”

Kudlow, however, tracks closer to Cohn’s view on trade and tariffs than Trump’s. He believes, as many of Trump’s advisers and confidants do, that the trade wars that Trump has said he wants could tank markets and effectively erase recent hard-won tax cuts for many Americans.

According to sources close to the president, Kudlow, along with Cohn and his allies, have advised Trump as much over the past weeks, but “it hasn’t sunk in,” as one senior Trump aide characterized it. And, as Kudlow tweeted, he had urged Cohn not to quit.

A major factor in why Trump was seemingly immovable on this issue, despite a campaign of appeals from friends and senior administration officials, was that—unlike so many of his current policy positions—Trump’s fondness for tariffs is long-held and consistent over the decades.

In 1989, Trump, who was then in the airline business, shocked members of an airline industry club when he used a speech to call for hefty tariffs on Japan, West Germany, and South Korea.

“Japan is truly taking advantage of the United States... They are ripping us like no one has ever ripped us before,” Trump said, according to an Associated Press report at the time. “We’re the biggest suckers in the world; we’re the biggest dopes in the world.”

He then suggested a 20 percent import tax, according to a United Press International report on the same meeting.

“You tax the hell out of the Mercedes Benz,” he said, according to UPI. “At least we’re getting our pound of flesh.”

In a 1990 ABC News story on cheap Japanese goods flooding the U.S. market, Trump again went off about trade. “America is being ripped off, and I’ll tell you what, we’re not going to have an America in 10 years if it keeps going like this,” he insisted. “We’re a debtor nation, and we have to tax, we have to tariff, we have to protect this country, and nobody’s doing it.”

And yet, decades later, Republican lawmakers still expressed shock at the president’s actions. They openly worried that Cohn’s departure will give further rise to the protectionist voices within the administration and make it harder for them to change the president’s mind. Earlier this week, many of them warned that tariffs could upend the economic message Republicans are hoping to use in this year’s midterm elections on the heels of the tax-cut legislation.

“The people who are promoting and supporting tariffs are playing with a stronger hand than they were before [Cohn’s resignation] in the White House in terms of the negotiating that’s going on,” said Sen. John Thune (R-SD), the chairman of the Senate Commerce Committee.

Sen. Jeff Flake (R-AZ) said Trump’s protectionist views on trade are ones that “he just comes back to” and it’s “completely and utterly irrational.”

Sen. Roy Blunt (R-MO), who has been among the most outspoken Republicans against the tariffs, told The Daily Beast he was hopeful that Cohn’s replacement would be on his side on the tariffs, but he acknowledged that his optimism isn’t necessarily based in reality.

“Hope was the right word,” he added.

Rep. Mark Meadows (R-NC), who speaks regularly with Trump and is against the tariffs, told The Daily Beast that he wasn’t “drawing conclusions” from Cohn’s resignation because Trump’s agenda is dependent more on his own beliefs than the advisers who surround him. For that reason, Meadows all but acknowledged, Trump wasn’t planning on heeding the advice of his detractors.

“I’m confident that the president is going to continue on a path that he believes is best for America overall, and that path has typically been one that would support this tariff initiative that he started,” Meadows told The Daily Beast, adding he was encouraged to hear that the administration is considering carve-outs for Mexico and Canada.

—with additional reporting by Jackie Kucinich