Harvard-trained economist Peter Navarro is a fierce China critic
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A new White House National Trade Council is being established by President-elect Donald Trump and on Wednesday he tapped Harvard-trained economist Peter Navarro to serve as assistant to the president and director of trade and industrial policy. Navarro is a fierce China critic whose policy recommendations, if adopted by Trump, would assuredly cause China to react, perhaps against U.S. farm products and in particular, soybeans. Navarro, currently a professor at the University of California-Irvine, will work to develop trade policies that help cut the U.S. trade deficit and expand growth, the Office of the President-elect said in a statement. Trump and Navarro struck up correspondence several years ago after Navarro saw an interview in which Trump praised one of his books critical of U.S. trade and military policy with China. One of Navarro’s books is titled The Coming China Wars: Where They Will Be Fought, How They Can Be Won. He has argued that China’s accession to the World Trade Organization (WTO) in 2001 halved American economic growth and cost it 70,000 manufacturing jobs. He has urged the U.S. and its allies to sharply reduce imports from China to deprive it of resources and to curb the country’s militaristic outlook. Otherwise, “we will have only ourselves to blame when the bullets and missiles begin to fly,” he wrote in his latest book. The National Trade Council will work with the National Security Council, the National Economic Council and the Domestic Policy Council. The council will advise the president on trade negotiation strategies, coordinate with other agencies to assess U.S. manufacturing capabilities and the defense industrial base, and help match unemployed U.S. workers with new opportunities. It also will lead the Buy America, Hire America program dealing with government procurement and projects ranging from infrastructure to national defense, the office said. Navarro and Commerce Secretary-designee Wilbur Ross worked to develop and communicate Trump’s trade and economic agenda during the presidential campaign, the president-elect’s office said. Trump has not yet appointed someone to the U.S. Trade Representative job. Senior Trump aides have said Commerce Secretary-designate Ross is going to be playing a central role in the development of trade policy. Navarro and Ross offered their views on what Trump administration trade policy should look like in a CNBC column in July (link). In it, they bashed what they called hollow victories for the United States in World Trade Organization disputes with China. They highlighted what they deemed “four of the most potent unfair trade practices many of our trade partners routinely engage in — currency manipulation, intellectual property theft, and the use of both sweatshop labor and pollution havens.” They argued that WTO membership did not protect the U.S. from those tactics. They argued against trade deficits and said the U.S. should be able to renegotiate deals if “gains are not distributed fairly.” “Besides hurting our workers, chronic trade deficits stifle economic growth while we now owe China and other trading partners trillions in U.S. Treasury debt,” they wrote. Guiding principle. They went on to write: “In any negotiation or renegotiation, our guiding principle should be this: Enter into a free trade agreement only if it both increases total trade and reduces our trade deficit. When these two conditions are met, real world trade will converge with textbook theory, this country will be far more prosperous, and a now shattered faith in the global trading order will be restored.” Navarro ran for office as a Democrat several times in the 1990s and also published investment advice books. He has described himself to the prominent economist writer Tyler Cowen as “a Reagan-Trump Democrat abandoned long ago by my party on the economy, trade and foreign policy.”
Comments: The new role will raise questions about how Navarro will interact with Trump’s eventual USTR, who has not yet been named. The USTR is in charge of trade negotiations and the enforcement of trade agreements. China responded. China’s government issued a response to the announcement. “China like every other country is closely watching the policy direction the US is going to take,” said a Foreign Ministry spokeswoman on Thursday, without mentioning the nominee’s name. “Cooperation is the only right choice for both sides.” China waiting. Cheng Dawei, a Renmin University of China economics professor and former trade advisor to Beijing said, “China won’t make the first move.” She said that China was using the time before the new administration takes power to collect evidence should it need to launch retaliatory trade cases against the U.S. “China is now preparing some weapons,” Cheng said. China’s Commerce Ministry “is quite busy now, I’m sure.” China’s targets, say trade experts, likely would be Boeing Co. aircraft and US farm exports, especially soybeans, from Midwestern Republican states. As of last month, China is awaiting delivery of 292 Boeing jets. Blocking soybean or other U.S. food exports would prompt action by U.S. lawmakers and commodity and farm group lobbyists. China also could issue informal trade barriers such as health claims against American food products that are difficult to counter in the WTO but hurt exporters. Other countries, including the U.S. and Europe, use similar non-trade barriers.
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NOTE: This column is copyrighted material; therefore reproduction or retransmission is prohibited under U.S. copyright laws. | |
