Gary Cohn. Alex Wong/Getty Images

President Donald Trump's top economic adviser, Gary Cohn, resigned from the White House on Tuesday.

A strong advocate of free trade, Cohn argued against Trump's planned tariffs on steel and aluminum.

With Cohn's imminent exit, there are few free-trade advocates left to stem the White House's protectionist tendencies.

Gary Cohn's announcement Tuesday that he would step down as President Donald Trump's top economic adviser not only signals the end to an up-and-down tenure in the administration but also creates a void that could have serious implications for the broader US economy.

With Cohn's imminent departure from the White House, Trump's inner circle is nearly void of voices to oppose the president's more protectionist tendencies at a time when trade policy has come to the forefront.

"The Globalists just lost their President," Chris Krueger, an analyst at Cowen Washington Research Group, wrote in a note to clients. "And the head of America First remains the Commander in Chief with an empowered army in the field ready to roll."

Since the start of Cohn's tenure, some Trump supporters have derisively called the former Goldman Sachs executive a "globalist" over his support for free trade and desire to rein in Trump's itch for more protectionist trade policies. In fact, the last straw for Cohn appeared to be Trump's decision to impose tariffs on imports of steel and aluminum.

Cohn argued that increased protectionism would damage the US economy and lead to job losses, a theory held by many economists. But Trump has long opposed free trade, and Cohn's voice fell on deaf ears.

According to Jonathan Swan of the news website Axios, Trump held Cohn in high regard after his success climbing from a commodities trader at Goldman Sachs to become the banking giant's second-in-command. Cohn was openly combative with the president and top aides on trade issues.

It's not just Cohn

Other free-trade advocates have left the administration recently. The White House staff secretary Rob Porter - who resigned following allegations of domestic abuse - was a key ally of Cohn's in the argument against tariffs.

The highest-ranking economic advisers left in the White House after Cohn departs all favor tariffs and strong trade protections. They include Peter Navarro, the director of the White House's National Trade Council and author of "Death by China," and Wilbur Ross, the commerce secretary and architect of the recent steel and aluminum restrictions.

The lack of a free-trade advocate already has market watchers and Wall Street spooked. The major US stock indexes opened down by 0.6% to 1% on Wednesday following the news.

Greg Valliere, the chief global strategist at Horizon Investments, said in a note to clients that Cohn's departure signaled a major shift in the White House.

"The departure of Gary Cohn is a very big deal for two reasons," Valliere said. "First, it signals that protectionist ideologues have prevailed over market-friendly pragmatists. Second, the vast majority of Republicans are in open rebellion against Trump on tariffs - this is a Chamber of Commerce party, at least on Capitol Hill, that loves free trade."

The change also comes at a critical juncture for the administration, with key decisions on trade issues still to come. Those include an investigation into Chinese intellectual property theft and negotiations over the North American Free Trade Agreement.

And Bloomberg has already reported that the administration is considering even more sweeping tariffs and trade restrictions on China.

"The clearest takeaway is that Cohn's departure serves as an unambiguous affirmation of the trade protectionist ascendancy in the West Wing," Isaac Boltansky, a policy analyst at the research firm Compass Point, said Wednesday. "The steel and aluminum tariffs, coupled with Cohn's departure, clearly suggest that President Trump's aggressive posture on trade issues - including NAFTA and China - will only harden in the months ahead."

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