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Civil War in Donald Trump White House Over Trade

The battle over trade is emblematic of a broader fight on economic policy within the Trump administration
Gary Cohn and Peter Navarro are both valued members of the president’s economic team. The picture shows President Trump shaking hands with Cohn.Gary Cohn and Peter Navarro are both valued members of the president’s economic team. The picture shows President Trump shaking hands with Cohn.

A 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 Street.

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 and Trump trade adviser Peter Navarro against a faction led by Gary Cohn, the former Goldman Sachs executive who leads Trump's National Economic Council, CNBC reported.

At the center of the debate is 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.

The officials and people dealing with the White House said Navarro appeared to be losing influence in recent weeks. But during the recent Oval Office fight, Trump appeared to side with the economic nationalists, one official said.

The battle over trade is emblematic of a broader fight on economic policy within the Trump administration. It comes ahead of a visit to Washington next week by 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.

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 economic agenda, protect American workers and grow American businesses."

Criticism Increases

According to people familiar with White House discussions, Cohn and others have seized on Navarro's public comments—and widespread criticism by economists of his stand on trade deficits and other matters—to try and sideline him.

That has led to discussions over moving 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.

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 Trump's top trade priorities.

After a meeting with Cohn and other White House officials on Thursday, Mexico's foreign minister, Luis Videgaray, said the goal was to wrap up talks quickly and by the end of this year. That contradicted Ross, who has called for deeper and potentially longer talks that could drag well into next year.

Navarro's case has not been helped by his interactions with Republicans in Congress. He was criticized for being ill-prepared and vague at a closed-door briefing he held with senators last month to discuss Trump's trade agenda and angered some Republicans as a result.

People familiar with the White House battle over trade said that Navarro, who did not respond to a request for comment, was cutting an increasingly isolated figure in the administration.

He has been operating with a very small staff out of an office in the Old Executive Office Building adjacent to the White House, while Cohn has been adding staff to his NEC base inside the president's residence itself.

Among Cohn's recent appointments has been Andrew Quinn, a respected former diplomat and trade official who served as a senior negotiator during the Obama administration's push for a Trans-Pacific Partnership with Japan and 10 other countries.

Trump has pulled the US out of the TPP but the White House last month announced Quinn would serve on the NEC as a "special assistant to the president" for international trade.

The appointment of Quinn drew a howl of protest from Breitbart, the rightwing web site Bannon used to lead. It labeled the career official an "enemy within" the Trump administration earlier this month.

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