Longstanding divisions in President Donald Trump’s White House burst into the open on Thursday, with defenders of his response to white nationalists facing off against the administration’s moderates.
At the centre of the power struggle — the president’s chief strategist Steve Bannon and his chief economic adviser Gary Cohn.
On Thursday, the administration was forced to dismiss reports that Mr Cohn planned to leave the administration following Mr Trump’s much-criticised remarks about the violence in Charlottesville and an interview with Mr Bannon in which the chief strategist attacked his White House rival.
People close to Mr Cohn denied reports that he intended to quit even though he had been offended by Mr Trump’s remarks, which appeared to equate the actions of white nationalist demonstrators with those of counter-protesters in Charlottesville.
“Nothing has changed,” a White House spokesman said. “Gary is focused on his responsibilities as [National Economic Council] director and any reports to the contrary are 100 per cent false.”
While tensions have long existed between Mr Bannon, an avowed economic nationalist, and Mr Cohn, who has urged Mr Trump to take a more centrist stance on issues such as trade, the events in Charlottesville have exposed the extent of the faultlines. They have also raised further questions on which side is likely to emerge as winner.
In his interview with The American Prospect, a left-leaning magazine, Mr Bannon asserted that he was engaged “in a fight every day” with Mr Cohn and “Goldman Sachs lobbying” — never mind that Mr Bannon, like Mr Cohn, also used to work at the New York investment bank.
On Thursday, Breitbart News, the far-right news site until recently headed by Mr Bannon, ran a news story with the headline: “As Gary Cohn Fails, President Trump Disbands His CEO Council.”
It is still unclear whose side will emerge on top. Mr Cohn is seen as a strong ally of Mr Trump’s daughter Ivanka Trump and son-in-law, Jared Kushner, as well as Dina Powell, another top adviser and former Goldman Sachs banker. Mr Bannon, meanwhile, shares many of the views of Stephen Miller, a fast-rising star in the administration who is the president’s chief speech writer.
The battle between the two men and their camps on economic policy has been fought hardest in the area of trade. Mr Bannon has been pushing for the president to live up to some of his most radical campaign promise and led a camp within the White House advocating the US withdrawal from the North American Free Trade Agreement. He has also pushed for national security investigations into imports of steel and aluminium that have drawn opposition from the business community and Mr Cohn.
The business community and foreign officials have quickly learned how to exploit the Bannon v Cohn battle in order to head off what they see as some of the most radical parts of Mr Trump’s economic agenda. That has made Mr Cohn and other members of his National Economic Council the main focus for many engaged in policy fights.
“This White House is schizophrenic. Our job is to feed the schizophrenia,” one lobbyist told the Financial Times.
This White House is schizophrenic. Our job is to feed the schizophrenia
Mr Cohn has helped his case by turning the council into one of the best-functioning parts of the White House and staffing it with capable mainstream experts. His top lieutenant on trade, Everett Eissenstat, is a Capitol Hill veteran and served in senior trade role in the Bush administration.
Other members of the administration have navigated a careful path between the two camps. Wilbur Ross, the billionaire investor who is now Mr Trump’s commerce secretary, has oscillated between them on trade policy. So too has Robert Lighthizer, the US trade representative.
The feud between the two men is likely to have repercussions well beyond the White House.
Mr Bannon made clear he is launching a full-scale attack on US state department, where morale has been low for months amid a dearth of senior appointments and the impression among some staff that there are attempts to undermine its hand in policymaking and diplomacy.
In his interview with The American Prospect, Mr Bannon said he was working to oust Susan Thornton, the respected career diplomat who has responsibility for China policy at state department, and replace her with hawks who take a hard line on China.
On Thursday, the state department pushed back against suggestions of Ms Thornton’s removal.
“The secretary of state asked Susan Thornton to lead in a very important role and he continues to rely on her to lead the state department’s diplomacy in Asia,” a spokesperson said.
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