White House economic advisor Gary Cohn became the latest casualty of US President Donald Trump's tumultuous administration, resigning in protest on Tuesday as Trump stepped up his threats of steep tariffs on steel, aluminium and European cars.
Mr Cohn led the charge on a tax cut proposal approved by Congress in December, but lost the internal struggle against more protectionist voices over trade tariffs.
"Gary has been my chief economic advisor and did a superb job in driving our agenda," Mr Trump said in a statement.
"He is a rare talent and I thank him for his dedicated service."
The White House downplayed the idea Mr Cohn resigned over more aggressive trade policies, but only moments before the announcement Mr Trump showed no signs of backing down even in the face of opposition from his own party.
Speaking to reporters, Mr Trump said he was elected to protect American workers and industries that had been harmed by years of unfair trade policies.
"Our country has been taken advantage of by everybody. By everybody. And we cannot let that happen any longer," Mr Trump said during a joint press conference with Swedish Prime Minister Stefan Lofven.
But Mr Trump's aggressive plan to punish abusers by imposing 25 perc ent tariffs on steel and 10 percent on aluminium, against friend and foe alike, angered US trading partners.
It also startled US automakers and firms that rely on those metals and the free flow of trade.
Even administration officials were caught off guard by the announcement late last week since the legal review had not been completed.
Reports of Mr Cohn's likely resignation began to circulate almost immediately.
It appears the 57-year-old former Goldman Sachs executive was drowned out by a decidedly more protectionist team including trade adviser Peter Navarro and Commerce Secretary Wilbur Ross.
Gary Cohn (C) listens during a meeting between President Donald Trump and congressional members in the Cabinet Room of the White House February 13, 2018. Source: Getty
Republican opposition
Mr Cohn is the latest in a long string of senior advisors to resign or be fired, a virtually unprecedented turnover of administration staff.
Hope Hicks, perhaps Mr Trump's most trusted confidante, announced last Wednesday she would resign as communications director.
Her move followed the departures of chief of staff Reince Priebus, national security advisor Michael Flynn and others.
Markets became convinced on Tuesday the tariffs might not be that bad and a trade war could be averted, but Mr Cohn's departure could portend a rocky trading session on Wednesday.
The tariff plan - which Mr Trump followed up with a threat to impose "reciprocal taxes" on all imports from countries that charge duties on US exports - also sent shivers through Republican leaders, whose party has traditionally embraced free trade.
House Speaker Paul Ryan was in the vanguard, calling on Mr Trump to have a "smarter" plan that was "more surgical and more targeted".
While there was "clearly abuse occurring" regarding overcapacity and dumping particularly by China, protectionist measures could have the "unintended consequences" of a trade war, Mr Ryan told reporters.
But Mr Trump once again dismissed the concerns about sparking a global confrontation, saying "trade wars aren't so bad ... the trade war hurts them. It doesn't hurt us".
Retaliation and counter-retaliation
Earlier on Tuesday, Treasury Secretary Steven Mnuchin said Mr Trump understood "the potential impact" of the measures on the economy.
Mr Mnuchin noted he had been working on the specifics of the tariff plan, which will be announced this week, "and I think we have a way of managing through this".
Mr Trump himself said, somewhat cryptically, the measures would be imposed "in a long, loving way".
Despite those apparent assurances, the EU already has threatened to retaliate against American blue jeans, bourbon and Harley-Davidson motorcycles.
Mexico's Economy Minister Ildefonso Guajardo vowed on Tuesday to fight back against US tariffs and target "the things they export that are most politically sensitive".
Mr Trump again hit out at the threats of countermeasures, saying if the EU reacts "then we put a big tax of 25 percent on their cars and believe me, they won't be doing it very long".
He also criticised Europe for making it "almost impossible for us do business with them".
It is just that kind of tit-for-tat confrontation that has economists fearing a real chance of a trade war that could do serious global economic damage.
Economist Ian Shepherdson of High Frequency economics said Mr Trump was "playing with fire".
"While the steel and aluminum industries are tiny relative to the overall economy, tariffs on those sectors are likely to lead to retaliation from other countries, with the Trump administration then potentially retaliating against the retaliation," he said in a research note.
Top officials and advisers who have resigned or been dismissed under Trump
Stephen Bannon - Chief strategist
Mr Trump's former chief strategist, Stephen Bannon, lasted less than seven months after he was reportedly removed by the administration. However, a New York Times report claims Mr Bannon had submitted his resignation to the president before he was stood down.
Sean Spicer - Press secretary
The embattled former press secretary lasted a turbulent six months after he resigned over Mr Trump's hiring of Anthony Scaramucci as communications director, according to reports.
Michael Flynn - national security adviser
Mr Flynn lasted only three weeks in the White House after Mr Trump asked for his resignation following claims he misled the vice president.
Reince Priebus - chief of staff
Lasting six months, Mr Trump asked for Mr Priebus' resignation to replace him with John Kelly.
Anthony Scaramucci - communications director
Mr Scaramucci was fired from the White House after 10 days following a verbal tirade during an interview.
Hope Hicks - White House communications director
Hope Hicks is set to resign for unknown reasons.
Gary Cohn - White House economic adviser
The former Wall Street banker, who became a key architect of the 2017 tax overhaul and a bulwark against protectionist forces within the Trump administration, is resigning from his post.
