This week, in response to President Trump’s intention to impose a tariff on steel and aluminum imports, economic advisor Gary Cohn resigned. While the current White House has been a veritable revolving door of aides and advisors in and out, this one was different. The business community was quiet when Sarah Huckabee Sanders took over for Sean Spicer as press secretary. It was somnolent when Dina Powell left as deputy national security advisor. However, Mr. Cohn’s exit sent the stock market into a frenzy. Was he the reason for the turmoil? Or, is something else afoot? Today, Gildshire looks at what is happening and connects the dots with the economy.
Though the Dow Jones Industrial Average isn’t the be-all and end-all of the economy (after all, the DOW is gamed to go up, per Adam Conover) stock watchers still pay attention to the DJIA. It provides a snapshot of the overall health of the American economy. Imagine the stock watchers’ dismay, then, when the Dow tumbled 300 points upon news of Cohn’s departure. Investors read the resignation as a signal that the President will carry out his vow to impose a 25% tariff on imported steel and a 10% tariff on aluminum. Wall Street investment pros fear the tariffs are the first shot in a damaging trade war.