Fear: Trump in the White House

by Bob Woodward

  A 17-page document that Cohn sent contained a chart showing the minuscule revenue earned in 2002–03 when President Bush had imposed steel tariffs for similar reasons. It showed that the revenue that came in was $650 million. That was .04 percent of the total federal revenue of $1.78 trillion.

  The estimated revenue from a 25 percent steel tariff would now be $3.4 billion, or .09 percent of expected total revenue of $3.7 trillion for 2018.

  Tens of thousands of U.S. jobs had been lost in industries that consumed steel, Cohn said, and produced a chart to prove it.

  Trump had three allies who agreed with him that trade deficits mattered: Secretary of Commerce Wilbur Ross, Peter Navarro and Bob Lighthizer, the U.S. trade representative.

  Navarro said that the data did not include the jobs created in the steel mills under the Bush tariffs of 2002–03.

  “You’re right,” Cohn said. “We created 6,000 jobs in steel mills.”

  “Your data is just wrong,” Navarro said.

  Trump was determined to impose steel tariffs. “Look,” Trump said, “we’ll try it. If it doesn’t work, we’ll undo it.”

  “Mr. President,” Cohn said, “that’s not what you do with the U.S. economy.” Because the stakes were so high, it was crucial to be conservative. “You do something when you’re 100 percent certain it will work, and then you pray like hell that you’re right. You don’t do 50/50s with the U.S. economy.”

  “If we’re not right,” Trump repeated, “we roll them back.”

  * * *

  NAFTA was another enduring Trump target. The president had said for months he wanted to leave NAFTA and renegotiate. “The only way to get a good deal is to blow up the old deal. When I blow it up, in that six months, they’ll come running back to the table.” His theory of negotiation was that to get to yes, you first had to say no.

  “Once you blow it up,” Cohn replied, “it may be over. That’s the most high-risk strategy. That either works or you go bankrupt.”

  Cohn realized that Trump had gone bankrupt six times and seemed not to mind. Bankruptcy was just another business strategy. Walk away, threaten to blow up the deal. Real power is fear.

  Over the decades Goldman Sachs had not done business with the Trump Organization or Trump himself, knowing that he might stiff anyone and everyone. He would just not pay, or sue. Early in Cohn’s time at Goldman there had been a junior salesperson who did a bond trade for a casino with Trump.

  Cohn told the young trader that if the trade didn’t settle, he would be fired. Fortunately for the trader, Trump did pay.

  Applying this mind-set from his real estate days to governing and deciding to risk bankrupting the United States would be a different matter entirely.

  * * *

  In another discussion with the president, Cohn unveiled a Commerce Department study showing the U.S. absolutely needed to trade with China. “If you’re the Chinese and you want to really just destroy us, just stop sending us antibiotics. You know we don’t really produce antibiotics in the United States?” The study also showed that nine major antibiotics were not produced in the United States, including penicillin. China sold 96.6 percent of all antibiotics used here. “We don’t produce penicillin.”

  Trump looked at Cohn strangely.

  “Sir, so when mothers’ babies are dying of strep throat, what are you going to say to them?” Cohn asked Trump if he would tell them, “Trade deficits matter”?

  “We’ll buy it from another country,” Trump proposed.

  “So now the Chinese are going to sell it [antibiotics] to the Germans, and the Germans are going to mark it up and sell it to us. So our trade deficit will go down with the Chinese, up with the Germans.” U.S. consumers would be paying a markup. “Is that good for our economy?” Navarro said they would buy it through some country other than Germany.

  Same problem, Cohn said. “You’re just rearranging deck chairs on the Titanic.”

  * * *

  The U.S. automobile industry was another Trump obsession. China was hurting the industry dramatically and U.S. workers even more, he alleged.

  Cohn assembled the best statistics that could be compiled. Trump would not read, so Cohn brought charts to the Oval Office. The numbers showed that the American auto industry was fine. One big chart showed Detroit’s Big Three were producing 3.6 million fewer cars and light trucks since 1994, but the rest of the U.S., mostly in the Southeast, was up the same 3.6 million.

  The entire BMW 3 series in the world were made in South Carolina, Cohn said. The Mercedes SUVs were all made in the United States. The millions of auto jobs lost in Detroit had moved to South Carolina and North Carolina because of right-to-work laws.

  What about the empty factories? Trump asked. “We’ve got to fix this.”

  Cohn had put another document, “U.S. Record in WTO Disputes,” in the daily book that Porter compiled for the president at night. But Trump rarely if ever cracked it open.

  “The World Trade Organization is the worst organization ever created!” Trump said. “We lose more cases than anything.”

  “This is in your book, sir,” Cohn said, and brought out another copy. The document showed that the United States won 85.7 percent of its WTO cases, more than average. “The United States has won trade disputes against China on unfair extra duties on U.S. poultry, steel and autos, as well as unfair export restraints on raw materials and rare earth minerals. The United States has also used the dispute settlements system to force China to drop subsidies in numerous sectors.”

  “This is bullshit,” Trump replied. “This is wrong.”

  “This is not wrong. This is data from the United States trade representative. Call Lighthizer and see if he agrees.”

  “I’m not calling Lighthizer,” Trump said.

  “Well,” Cohn said, “I’ll call Lighthizer. This is the factual data. There’s no one that’s going to disagree with this data.” Then he added, “Data is data.”

  * * *

  Cohn occasionally sought Vice President Pence’s help, always in private conversations. He made his case on steel and aluminum tariffs. “Mike, I need your help on this.”

  “You’re doing the right thing,” Pence said. “I’m just not sure what I can do.”

  “Mike, there’s no state going to be hurt worse than Indiana on steel and aluminum tariffs. Elkhart, Indiana, is the boat and RV capital of the world. What goes into boats and RVs? Aluminum and steel. Your state is going to get killed on this.”

  “Yeah, I got it.”

  “Can you help me?”

  “Doing everything I can.”

  As usual, Pence was staying out of the way. He didn’t want to be tweeted about or called an idiot. If he were advising Pence, Cohn would have had him do exactly that—stay out of it.

  * * *

  Kelly concluded that Peter Navarro was the problem. Navarro would get into the Oval Office and spin Trump up on the trade deficits. Since he was preaching to the converted, Trump would soon be in full activist mode, declaring, I will sign today.

  Cohn took every chance he could get to tell Kelly how Navarro was an absolute disaster. Get rid of him, Cohn argued, fire him. This place is never going to work as long as he is around.

  Kelly asked Porter for his opinion. “The current status quo is unsustainable,” Porter said. “I don’t think you can get rid of Peter, because the president loves him. He’d never allow for that.” You can’t promote Navarro, like he wants, because that would be absurd. “Peter needs to be responsible to someone, other than feeling like he’s got a direct report to the president. A lot of times I’m able to block him.”

  Kelly decided he was going to assert control, and called a meeting of the combatants for September 26. It was like a duel. Navarro was allowed to bring in a second and he chose Stephen Miller. Cohn brought Porter.

  Navarro started off arguing that during the campaign he was promised to be an assistant to the president. Now he was only a deputy assistant. This is a betrayal. He said he coul
dn’t believe it had lasted this long. He had talked to the president, who did not really know the difference between an assistant to the president and a deputy assistant. The president thought special assistant sounded a lot better, not realizing it was an even lower position.

  Navarro said that the president had told him he could have whatever title and reporting structure he wanted. He and his Trade Council represented the American worker, the manufacturing base, the forgotten man.

  “Peter’s out there going rogue,” Cohn responded. “He’s creating these problems. He’s telling the president lies. He’s totally unchecked. He’s the source of all the chaos in this building.”

  “Gary doesn’t know what he is talking about,” Navarro replied. “Gary’s just a globalist. He’s not loyal to the president.” And Porter was always fiddling with the process and manipulating to delay everything so Navarro couldn’t get in to see the president.

  “All right,” Kelly said. “I can’t deal with this anymore. Peter, you’re going to be a member of the National Economic Council, and you’re going to report to Gary. And that’s just how it’s going to be. And if you don’t like it, you can quit. Meeting over.”

  “I want to appeal this,” Navarro said. “I want to talk to the president.”

  “You’re not talking to the president,” Kelly said. “Get out of my office.”

  Months went by. “Where the hell is my Peter?” the president asked one day. “I haven’t talked to Peter Navarro in two months.” But, as was often the case, he did not follow up.

  CHAPTER

  34

  Trump’s face-off with Kim Jong Un was growing increasingly personal.

  On Air Force One when tensions were ramping up, Trump said, in a rare moment of reflection, “This guy’s crazy. I really hope this doesn’t end up going to a bad place.”

  He delivered contradictory comments on North Korea from provocative and bombastic to assertions that he wanted peace. In May he said he would be “honored” to meet with Kim “under the right circumstances.” In August he told the press, “North Korea best not make any more threats to the United States. They will be met with fire and fury like the world has never seen.”

  With no resolution, McMaster issued a new strategy outlining a North Korea Pressure Campaign. The plan, put forward in a signed document, was designed to pressure North Korea and China to negotiate the North’s nuclear weapons program and cease development of their ICBMs. Treasury would work on sanctions. State would work on engagement with China to pressure the North.

  The Defense Department was to make military incursions such as overflights, going into their airspace in exercises called Blue Lightning, and engage in limited cyber activity to demonstrate capability and show the threat. But these actions were not to trigger an unintended conflict.

  McMaster kept repeating in the NSC that Trump could not accept a nuclear North Korea.

  But the president summed up his position on almost everything in an interview with The New York Times. “I’m always moving. I’m moving in both directions.”

  * * *

  Joint Chiefs of Staff Chairman Dunford formed a strategic communications cell in his Operations Directorate, J3, to look at the messaging opportunities in North Korea. What actions could be taken that were just threatening enough to be a deterrent?

  When there were three aircraft carriers in the vicinity, Mattis voiced discomfort. Could this trigger an unanticipated response from Kim? Could the United States start the war they were trying to avoid? He showed more concern about this than many others in the Pentagon and certainly in the White House.

  Mattis was a student of historian Barbara Tuchman’s book The Guns of August about the outbreak of World War I. “He’s obsessed with August 1914,” one official said, “and the idea that you take actions, military actions, that are seen as prudent planning, and the unintended consequences are you can’t get off the war train.” A momentum to war builds, “and you just can’t stop it.”

  Mattis did not want war. The status quo and a no-war strategy, even amid powerful, overwhelming tensions, were a win/win.

  The official summed it up: “Mattis and Dunford’s view is that North Korea can be contained. Dunford actually said, ‘This was my advice to the president.’ ”

  * * *

  On September 19, 2017, President Trump gave his first address to the United Nations General Assembly. For the first time, he dubbed the North Korean Leader “Rocket Man.” He said the United States, if forced to defend itself, “will have no choice but to totally destroy North Korea.”

  Kim fired back three days later. “A frightened dog barks louder,” and said Trump is “surely a rogue and a gangster fond of playing with fire. I will surely and definitely tame the mentally deranged U.S. dotard.”

  In a tweet on September 23 Trump called Kim “Little Rocket Man.”

  Trump and Rob Porter were together in the president’s front cabin on Air Force One. Fox News was on the TV.

  “Little Rocket Man,” Trump said proudly. “I think that may be my best ever, best nickname ever.”

  “It is funny,” Porter said, “and it certainly seems to have gotten under Kim’s skin.” But, he asked, “What’s the endgame here? If we continue to amp up the rhetoric and get into a war of words and it escalates, what are you hoping to get out of this? How does this end?”

  “You can never show weakness,” Trump replied. “You’ve got to project strength. Kim and others need to be convinced that I’m prepared to do anything to back up our interests.”

  “Yes, you want to keep him on his toes,” Porter said. “And you want some air of unpredictability from you. But he seems pretty unpredictable. And we’re not sure, is he even well? Is he all mentally there? He doesn’t have the same political constraints that other people do. He seems very much to want to be taken seriously on the international stage.”

  “You’ve got to show strength,” the president repeated.

  “I wonder,” Porter plowed on, “if embarrassing him is more likely to sort of get him into submission or if it could also provoke him?”

  Trump didn’t respond. His body language suggested that he knew Kim was capable of anything. Then he offered his conclusion: It was a contest of wills. “This is all about leader versus leader. Man versus man. Me versus Kim.”

  * * *

  At the end of September, General Kelly asked Graham to come to the White House for an upcoming tabletop exercise on North Korea.

  Contradictory messages from Trump and Tillerson were flooding the news. For weeks, Tillerson had been out publicly with what he called the “Four Nos”: The United States was not seeking regime change; or a collapse of the regime; was not looking for an accelerated reunification of the North and South; and did not want an excuse to send troops into the North.

  “We’ve got the guy guessing,” Kelly said to Graham, referring to Kim Jong Un.

  Graham made a dramatic proposal to Kelly and McMaster. “China needs to kill him and replace him with a North Korean general they control,” Graham said. China had at least enough control so the North would not attack. “I think the Chinese are clearly the key here and they need to take him out. Not us, them. And control the nuclear inventory there. And wind this thing down. Or control him. To stop the march to a big nuclear arsenal. My fear is that he will sell it.”

  He proposed that Trump tell China: “The world is a dangerous place. I am not going to let this regime threaten our homeland with a nuclear weapon.”

  Graham said Trump had told him he would not let this happen. He had done everything but take an ad out in the newspaper telling the world what Trump had told him to his face.

  * * *

  On October 1, months after Tillerson had begun publicly reaching out to North Korea to open a dialogue, Trump tweeted: “I told Rex Tillerson, our wonderful Secretary of State, that he is wasting his time trying to negotiate with Little Rocket Man. Save your energy Rex, we’ll do what has to be done!”

 
The bellicose tweet was widely interpreted as undermining the nation’s top diplomat.

  Trump had apparently been seized by an impulse. During the presidential campaign, Trump himself had extended an olive branch voicing a willingness to negotiate with Kim over a hamburger.

  But overlooked was that Trump had a way of appearing to strengthen his own hand by creating a situation, often risky, that did not previously exist. Threatening the volatile North Korean regime with nuclear weapons was unthinkable, but he had done it. It turned out to be only the beginning. The go-along, get-along presidency of the past was over.

  * * *

  Trump was soon tugging harder on Kelly’s leash and after several months the Kelly mystique of controlling Trump faded. It was clear that Trump didn’t like outsider control emotionally, as if to say, I can’t deal with this anymore. I feel cocooned. I feel I’m no longer in charge.

  In November, Trump saw Chris Crane, the head of the Immigration and Customs Enforcement (ICE) union, complaining on Fox News about access to Trump. He said Trump was letting them down. The union had endorsed Trump six weeks before the election, the first time the National ICE Council, as it was called, had endorsed a presidential candidate.

  Trump went through the roof.

  Kelly and Chris Crane had an intense dislike for each other. When Kelly had been secretary of homeland security, he had blocked ICE agents from a hard-line crackdown on some immigration violations.

  Trump invited Crane to the Oval Office without informing Kelly. Kelly’s cut off all our access, Crane said. We put ourselves on the line for you. We endorsed you. We support all your policies. Now we can’t even communicate with you.

  Kelly heard Crane was in the Oval Office and strode in. Soon Crane and Kelly were cursing each other.