When Donald Trump travelled to the World Economic Forum at Davos two months ago, the global business leaders who met him there seemed relieved by the encounter, if not entirely reassured.
That was partly because their expectations had been so low. It was also because Mr Trump talked about deregulation and tax cuts. But a third — less noticed — factor was that the US president repeatedly stressed to the assembled chief executives that he had arrived with a team.
Mr Trump took more senior officials to Davos than any of his predecessors and the officials in this caravan — Gary Cohn, Dina Powell, Steven Mnuchin, Jared Kushner, Wilbur Ross, Elaine Chao, HR McMaster, Rex Tillerson and others — struck a credible pose. Or as the chief executive of one European company observed: “Trump’s tweets seem crazy. His team does not.”
This week, however, CEOs around the world are feeling less reassured. In some senses, the news that Mr Cohn has resigned as head of the National Economic Council, after losing a fight to prevent the introduction of trade tariffs, should come as no surprise.
There have been other White House departures in recent weeks and Mr Cohn had been visibly unhappy for some time. But his move is nevertheless significant. For Mr Cohn played a subtle, but very important structural role in the inner workings of the White House.
During the chaotic first year of the Trump administration, there have been two pillars of the White House that have functioned relatively well. One was the National Security Council, run by General McMaster; the other the National Economic Council, headed by Mr Cohn, which has driven through tax reform (among other things).
These two men, who are close, have adopted a modus operandi that any chief executive might recognise as “normal”: they know how to run organisations, produce “to do” lists and create agendas for meetings. They hate it when their procedures are turned upside down. (The tipping point that prompted Mr Cohn’s departure was not simply that Mr Trump was embracing a tariff policy he hates, but that pro-tariff advisers such as Peter Navarro were flouting normal procedures.)
White House insiders suspect that Gen McMaster will be gone by the summer, too. So the key question is who will be able to create a sense of policy structure and execution, and also project “normality” to the outside world.
Some of that Davos caravan remain in place. Mr Mnuchin, the Treasury secretary, has cannily kept quiet when controversy has erupted, and has bent with the wind of Mr Trump’s moods. Mr Ross, the commerce secretary, is another wily survivor who knows when to keep his head down.
But neither Mr Ross nor Mr Mnuchin has the authority to create or execute an overarching policy. Meanwhile, the role of Mr Kushner, the president’s son-in-law, was weakened when he had his security clearance revoked. Mr Tillerson is relatively toothless at the state department and, while Ms Chao has also survived as transport secretary, she has had little to do, since Mr Trump’s infrastructure plan has stalled. Meanwhile John Kelly, chief of staff, has been weakened by recent scandals and there is speculation he may also be removed.
Little wonder, then, that White House policymaking now has a capricious “Wild West” feel. Last week Mr Trump insisted he would impose blanket tariffs on steel and aluminium. On Wednesday, officials hinted at exemptions for Canada and Mexico — or even Europe.
Who knows what will happen next? The only thing that is clear is that investors and business executives have to deal not only with policy uncertainty, but also with a deeply uncertain process for creating policy in the first place. This is a pattern more normally found in an emerging market.
Maybe things will settle down when, or if, a replacement for Mr Cohn is found. But some mainstream Republicans hope the chaos will become so bad that it sparks a full-blown crisis — tumbling stock markets or a drubbing in the midterm elections — that forces Mr Trump to change tack.
Don’t bet on that happening quickly. The stock market — and the president’s polling numbers — still seem quite stable, and Mr Trump appears convinced that the easiest way to exercise power is to destabilise his enemies and his own team alike. Perhaps the biggest surprise about Mr Cohn is, not that he decided to leave this week, but that he lasted so long. All eyes are now on Gen McMaster — even (or especially) if he is not in the spotlight this week.