A “civil war” in the White House?

The Financial Times reports thatA 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 stephen-k-bannon-ohio-rally-sept-14-getty-640x480Street … [and] … 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 BN-CA944_garyco_E_20140321180911and 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.

The reports goes on to say that “At the centre 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 … [and] … The officials and people dealing with the White House said Mr Navarro appeared to be losing influence in recent weeks. But during the recent Oval Office fight, Mr Trump appeared to side with the economic nationalists, one official said.

Spare a bit of sympathy for Prime Minister Justin Trudeau and Foreign Minister Chrystia Freeland as they try to make sense out of the signals coming from Washington.

The battle over trade,” the Financial Times goes on to say, “is emblematic of a broader fight on economic policy within the Trump administration. It comes ahead of a visit to Washington next week by Ms Merkel, the German chancellor, and amid preparations for a meeting of G20 finance ministers in Germany next week at which allies’ concerns over protectionism are likely to be high on the agenda … [and] …  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 Peter-Navarro-White-House-National-Trade-Council-1024x536economic agenda, protect American workers and grow American businesses” … [but] …  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 … [and] … 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. 

This matters to Canada because, according to the FT report: “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.

In potentially “good news,” the reports says that “Thea Lee, a top trade official at the AFL-CIO, the US’s largest union, and a member of the president’s recently-appointed manufacturing council, said that Mr Trump appeared to be bending to the growing influence of the administration’s Wall Street veterans and walking away from his campaign promise for a fresh approach to trade …  “At the moment it appears that the Wall Street wing of the Trump administration is winning this battle and the Wall Street wing is in favour of the status quo in terms of US trade policy,” Ms Lee said.” One can but hope … but it still appears that President Trump makes “policy” on some mix of emotion and the opinion of the last person to speak loudly enough.

Canada needs to hope that Mr Cohn and Rex Tillerson and James Mattis and Vice President Pence all speak loudly … and last.

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