White House National Trade Council Director Peter Navarro, an economist who has advocated ending Washington’s “one China” policy, said he believes that Chinese goods are literally poisoning US citizens and has said that trade deals have weakened the US economically with the connivance of US business, has emerged as the big winner from renewed turmoil in the White House.
While he has said that he is not in the running to replace White House chief economic adviser Gary Cohn, who has said that he would quit, he would be a big winner from the departure of a person seen as a bulwark against economic protectionism.
Sidelined under Cohn, to whom he has reported since late last year, Navarro would now appear to have free rein. He has publicly backed US President Donald Trump’s proposed steel and aluminum tariffs in media appearances, after being out of the public eye for months.
Navarro has endorsed withdrawal from the North American Free Trade Agreement as well as from the US-Korea Free Trade Agreement. He believes that the WTO allows unfair tax practices, such as value-added taxes that penalize US business.
However, Navarro’s main target has been China.
He has backed a 45 percent tariff on imports from China to combat what he has said is Beijing’s policy of illegal export subsidies, currency manipulation, intellectual property theft, and lax worker safety and environmental regulations.
“Just as these Chinese leaders have been exploiting American weakness by cheating in the trade arena, they will acknowledge the strength and resoluteness of Trump and rein in their mercantilist impulses,” Navarro and now-US Secretary of Commerce Wilbur Ross wrote in an economic paper for Trump’s 2016 election campaign.
Trump on Wednesday said that he has demanded concessions from China on trade that appeared to align with Navarro’s policies.
US Secretary of the Treasury Steve Mnuchin also chimed in on taking action on China, telling Fox Business Network that the US would get “reciprocal trade with China.”
“China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States,” Trump wrote in a post on Twitter on Tuesday, mistakenly referring to a deficit, while Beijing runs a surplus.
China last year ran a trade surplus of US$375.2 billion with the US. Overall, the US trade deficit with other countries was US$566 billion last year.
White House spokeswoman Sarah Huckabee Sanders said that the issue had been raised with a Chinese delegation last week.
Chinese President Xi Jinping’s top economic adviser, National Development and Reform Commission Vice Chairman Liu He (劉鶴), held talks with the administration last week.
Sanders said that she was not aware of any Chinese response so far.
Navarro, 68, has doctorate in economics from Harvard University and is a Democrat. He is the author of several books highlighting the danger of China’s economic and military rise, including Death by China: Confronting the Dragon — A Global Call to Action.
He has also attacked Germany, saying its companies have benefited unfairly from an undervalued euro.
Trump has threatened to impose hefty tariffs on European car imports.
Navarro’s ire is not reserved just for other countries. He believes US company executives have aligned themselves with China’s agenda due to their “narrow profit-maximizing interests.”
“Indeed, with their bread now being buttered offshore, so-called ‘American’ organizations like the Business Roundtable and National Association of Manufacturers transformed from staunch critics of Chinese mercantilism into open, and often very aggressive, soldiers in the pro-China Lobby,” he wrote in Death by China.
“Unscrupulous Chinese entrepreneurs are flooding world markets with a range of bone-crushing, cancer-causing, flammable, poisonous, and otherwise lethal products, foods, and drugs,” he wrote.
Navarro’s economic views have been dismissed by most economists as “fringe” and “oddball,” although Trump has hailed him as a “visionary.”
He in 2006 emerged unheralded as a China commentator after years of writing about energy regulatory issues as a professor at the University of California-Irvine.
He and Ross in their campaign paper calculated that, had the US been able to eliminate its US$500 billion trade deficit in 2015, it would have bolstered the economy by 3.38 percentage points and produced a growth rate of 5.97 percent.
Those calculations were derided as “magical thinking” at the time by many economists, who said that the trade deficit is determined by the difference between saving and investment.
Rising imports were caused by less savings and not by “perfidious foreigners and incompetent trade negotiators,” as Trump has suggested, a report by the Peterson Institute for International Economics said at the time.
Trump has said that the US would emerge as a winner in any trade war, as its imports are so large that other countries would be forced to negotiate.
“Our jobs have been stolen from us, our businesses have been taken,” Trump told a news conference on Tuesday.
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