Donald Trump has chosen economist and CNBC contributor Larry Kudlow to replace Gary Cohn as director of the White House National Economic Council, adding a longtime confidant to the president’s inner circle.
White House Press Secretary Sarah Huckabee Sanders said Kudlow “was offered, and accepted, the position.” She added the administration “will keep everyone posted on the timing of him officially assuming the role.”
Kudlow, 70, is expected to provide a familiarity and loyalty to Trump as the president removes moderating and dissenting voices from his administration. The president, who cited differences over Iran when he fired Secretary of State Rex Tillerson Tuesday, has tired of a senior staff that often opposed causes he championed as a candidate.
A television host from New Jersey, Kudlow is seen as temperamentally and politically similar to the president. He’s also seen within the White House as having credibility on both Wall Street and in Washington, where he served as an adviser to former President Ronald Reagan.
That’s critical to Trump, who has seen his White House hemorrhage top aides as his presidency enters a crucial stretch of foreign and domestic policy-making ahead of November’s crucial midterm elections.
Kudlow’s views on trade, however, could be a source of friction after Trump’s recent move to impose steep tariffs on steel and aluminum imports.
“He is a cheerleader for growth,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research. “He regularly says ‘Free market capitalism is the best path to prosperity.’ He is a forceful advocate for open markets and trade liberalization, and more generally an economic libertarian who favours low taxes and less regulation.”
The president, whose outsider appeal swept Republicans into total control of the federal government, is now seen as a drag on GOP lawmakers facing re-elections. A torrent of scandals — including revelations that former staff secretary Rob Porter maintained his job despite a background check that turned up allegations of spousal abuse — have shaken the confidence of his staff. The episodes have also eroded Trump’s appeal among suburban voters and led to a crackdown on security clearances culminating in the departure of some top aides.
The reverberations were apparent in Tuesday’s special election in a western Pennsylvania congressional district, where Democrat Conor Lamb leads a too-close-too-call race in a district the president won in 2016 by 19 points. Trump had visited the district — a prime beneficiary of his recent decision to slap tariffs on steel imports — just days earlier to campaign for Republican Rick Saccone.
Trump has responded by seeking to amplify economic successes during his administration — a task in which he hopes Kudlow, a veteran of financial media, can assist.
Cohn announced his departure last week after Trump moved forward with the metals tariffs — a plan Cohn had vociferously opposed.
Kudlow clashed with Trump in the past. In 2016, when a tape surfaced before the election featuring Trump boasting about grabbing women’s genitals, Kudlow said he was “furious” and threatened to vote for Mike Pence as a write-in candidate.
Earlier this month, he wrote a column for CNBC describing the president’s tariffs as “a regressive tax on low-income families.”
“Trump should also examine the historical record on tariffs, because they have almost never worked as intended and almost always deliver an unhappy ending,” Kudlow wrote in the March 3 column, which also included praise for other parts of the president’s economic agenda. Kudlow has strongly backed the tax overhaul that Trump signed at the end of last year.
Yet, as he left the White House on Tuesday for a trip to California, Trump said Kudlow “now has come around to believing in tariffs.”
In an interview with the Wall Street Journal on Wednesday, Kudlow says he was encouraged by the president moving to grant temporary waivers on the steel and aluminum import tariffs to allies including Canada, Mexico, and Australia.
“He said to me several times, ‘I believe in global trade. I regard myself as a global trader, but it has to be fair trade to protect America,’” Kudlow said. “I’m on board with that. I personally hope widespread tariff use — it doesn’t come to that. But in some cases, it will.”
Kudlow also indicated the administration was readying a larger round of tariffs against Chinese imports. On Tuesday, Reuters reported that the president was seeking to impose tariffs on up to US$60 billion of Chinese imports in the technology and communications sectors, citing concerns over intellectual property theft.
“I am very strongly in favour of tariffs on China, because they continue to violate our intellectual property rights and so forth,” the Wall Street Journal quoted Kudlow as saying.
The president himself continued to highlight trade issues ahead of his flight Wednesday morning departing California, where he had toured border wall prototypes and held a political fundraiser.
“We cannot keep a blind eye to the rampant unfair trade practices against our Country!” Trump tweeted.
Kudlow’s economic forecasts on CNBC and in a regular column in the past decade have sometimes been off the mark. In December 2007, the month the National Bureau of Economic Research later dated the start of the worst recession since the 1930s, he was arguing there was no recession and that the “Bush boom continues.”
Kudlow contended there was no housing bubble before U.S. housing prices crashed. And he warned in 2010 that former Federal Reserve Chair Janet Yellen would usher in a new era of higher inflation, while instead price gains have fallen short of the central bank’s 2 percent forecasts.
His best prediction has been that the stock market would go up if Trump were elected, contrary to many economists including Paul Krugman who predicted a decline.