What's going on?

Markets are rumbling after Gary Cohn, the top economic adviser to US President Donald Trump widely seen as a pro-trade and pro-business influence, announced that he was resigning his post.

What does this mean?

Cohn, a former executive at investment bank Goldman Sachs, is probably best known for overseeing recent tax reforms and pushing for a rewrite of financial markets regulation. During his 14-month stint at the White House, he tended to push back against the anti-free trade policies of the Trump administration, which came to a head recently as it announced plans to impose tariffs on US steel and aluminum imports.


Many believe that Cohn�s resignation is in protest against the potential tariffs (which he didn�t support). And with free trade skeptics apparently in the ascendant at the White House, markets seem to be anticipating some of the consequences� (tweet this)

Why should I care?

For markets: Currencies and stocks around the world have been fluctuating.

US stocks were trading down on Wednesday, especially American companies exposed to metal prices and international trade like General Motors, Caterpillar and Boeing. Stocks in other parts of the world were affected too, including European automakers who stand to face higher costs if a tit-for-tat trade war between Europe and the US materializes. Meanwhile, investors sold off the dollar and poured into the Japanese yen, as is typical when markets perceive risk and look for a �safe haven�.

The bigger picture: The United States� trade deficit is at a nine-year high.

Trump argues that the persistent trade deficit (i.e. how much more the US imports than it exports) proves that foreign companies have flooded the US economy with cheap goods to the disadvantage of American manufacturers, who can�t afford to compete. The idea is that counterbalancing measures like tariffs could help establish a more level playing field.