Former White House economic adviser Gary Cohn on Thursday contradicted his former boss on the importance of trade deficits, which President Trump has frequently railed against.
“I have always said a trade deficit doesn’t matter. In many respects it’s helpful to our economy,” Cohn, the former director of the White House National Economic Council, said at a Washington Post event.
Cohn’s views on trade have long clashed with Trump’s, and he left the White House after Trump began ramping up tariffs on major U.S. trade partners.
Cohn went on to say that a trade-induced downturn could wipe out the positive economic gains of the GOP tax law, which was his central accomplishment in the White House.
“I’ve always been worried that trade can have a derailing effect on the US economy,” he said.
Cohn went out of his way to defend Trump’s intentions, saying he believes the president’s actions on trade are ultimately focused on improving the American economy and bringing down trade barriers.
But when pressed, he admitted that trade tensions among American allies had ramped up significantly between the last Group of Seven summit in Italy and the one last weekend in Canada. At the most recent summit, Trump pulled his support from the joint communiqué with the other six members of the group.
“I’m not going to sit here and tell you there’s not a lot of friction in the system,” Cohn said.
Cohn also took a jab at the administration’s reputation for having a casual relationship with the truth.
Unlike in his previous work environments, he said, once he arrived at the Trump White House “it takes enormous amount of time to figure out who has facts, who doesn’t have facts, who’s just driving a political agenda.”
When asked if the facts always won out in such discussions, he smiled and replied, “I may not comment on that.”
Turning to the tax-reform law, Cohn deflected on whether the revenue-cutting move would, as Treasury Secretary Steven Mnuchin claimed, add to the deficit.
“It won’t be revenue neutral. It may be revenue positive, it may be revenue negative, we don’t know,” he said.
The Congressional Budget Office estimated the law could add $1.9 trillion to deficits over a decade.
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