Gary Cohn’s resignation from Trump administration has created havoc in market and business world. It is being wondered if the US trade policy is at the commencement of a move away from the free flow of goods towards the protectionist attitude. Cohn, the president’s chief economic adviser till he declared his resignation was seen a dependable hand in the disorganized White House, an established financial executive consigned by Wall Street and liked by business leaders for his pro-trade views. Cohn was involved in passing of the historic US tax slashed late last year that should augment corporate profits by diminishing their tax rates.
His declared departure has shaken the financial markets and posed questions among skittish CEOs about if his substitution will be a proponent of free trade or approve more populist and nationalist economic policies. When his resignation news was finally deciphered he Dow Jones industrial average plummeted by 400 points in after-hours trading. The market nervousness continues with the blue chip average closing down 83 points, or 0.3%, after an earlier drop of 350 points.
The unfathomable fear according to Wall Street is that Cohn’s digression could indicate a coagulating line on tariffs. That move in contemplation they say promotes the possibility of a fully developed trade war as other countries reciprocate by levying similar taxes on American produced goods imported to their countries. Trump is goading his staff to decide plans for his suggested 25% tariff on imported steel and 10% levy on aluminum — which Cohn did not accept.