Cohn’s departure adds to the picture of a White House in chaos

The signs were there if you looked closely enough. On Tuesday afternoon at a press conference with the Swedish Prime Minister, Donald Trump denied there was “chaos” within his administration. “Everyone wants to work in the White House,” he said.

Earlier in the day, the president had tweeted cryptically: “People will always come & go, and I want strong dialogue before making a final decision. I still have some people that I want to change (always seeking perfection).”

By the end of the day, Gary Cohn, President Trump’s chief economic advisor, had confirmed his resignation.

The timing was no coincidence. News of his departure leaked out after US stock markets closed. After all, Gary Cohn’s exit is an event that moves markets. The former Goldman Sachs executive has been a key player in the Trump administration from the outset. A regular fixture on the Davos circuit, the billionaire banker had surprised many colleagues and friends when he joined the Trump administration over a year ago. But for many, he was a reassuring presence, one of the so-called ‘adults in the room’ and a committed globalist who could counteract the protectionist tendencies of the economic nationalists such as Steve Bannon and Peter Navarro.

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Ultimately those tensions boiled over this week, as the protectionist world view clashed with the economic ethos of Mr Cohn over the issue of tariffs. Mr Trump’s shock announcement of plans to place tariffs of 25 per cent on steel imports and 10 per cent on aluminium caught even his own advisors by surprise. While a policy announcement had been looming, no final decision had been made, and the legal analysis underpinning the decision was still ongoing. But Mr Trump, perhaps with an eye to a looming primary contest in Pennsylvania next week and a need to keep his support base on board, sided with Wilbur Ross and Peter Navarro and came down on the side of punitive import tariffs on goods. Over the last week, discussion has continued within the West Wing about the way forward, with Mr Cohn - as well as senior Republicans on Capitol Hill - urging the president to reconsider or at least temper the tariffs, which many fear will spark a trade war.

In the immediate term Cohn’s departure is likely to have two effects.

Firstly, it is a blow to those who hoped Mr Trump might change his mind on the tariffs. As senate majority leader Mitch McConnell said on Tuesday, there is a “high level of concern” among Republicans about the proposed measures - not only because the notion of protectionism is anathema to most Republicans, but because they are worried about the impact on consumers and voters. Millions more American jobs are in industries that depend on steel and aluminium imports, than are employed directly by the US steel and aluminium industries. As Republican Jeb Hensarling put it: “We’ve got, you know, 300 million people who consume steel and aluminium. I mean, is this going to send up the price of a six-pack [OF BEER]at a grocery store?” Mr Cohn’s exit indicates that the economic nationalism espoused by figures like Mr Navarro and Mr Ross is on the ascendant in the White House, despite the departure of Steve Bannon.

Secondly, Mr Cohn's departure has added to the picture of a White House in chaos. Mr Cohn is the latest Trump stalwart to depart the White House following the resignation of long-time aide Hope Hicks last week. He was also seen as among the most moderate of the top Trump aides. While Mr Trump insisted that the churn of staff was nothing to worry about, only a handful of aides who began the Trump presidency in the West Wing remain, including Kellyanne Conway, Steven Miller and Mr Trump's daughter Ivanka and son-in-law Jared Kushner. Concerns have also been raised about the future of National Security Advisor HR McMaster and attorney general Jeff Sessions.

While the market falls that could be seen in after-hour trading as a response to Cohn’s departure reflects the concern by markets at the exit of one of their own from the inner circle of the world’s largest economic power, the ongoing personnel turmoil in the White House is equally unsettling. As Mr Trump appears to lurch from one policy position to another - from his mixed messages on immigration and gun crime, to his contradictory statements on North Korea - investors and the world are beginning to realise that unpredictability is the only certainty in this presidency.