Navarro: China Trade Tensions No Higher Than in 2019
Peter Navarro, White House senior counselor for trade and manufacturing, argues that academics, editorial writers and analysts who say higher tariffs hurt domestic manufacturing are all wrong.
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Navarro, who Council on Foreign Relations President Michael Froman called the chief architect of the Trump administration's trade and tariff strategy, spoke at CFR on Oct. 17.
Navarro said proudly that The Wall Street Journal ran an editorial headlined "The Navarro Recession" during the first Trump term.
"They were wrong," he said.
New York Times trade reporter Ana Swanson noted that the number of manufacturing jobs has declined this year, as has spending on factory construction. She said that businesses are expected to pay $1.2 trillion in tariffs this year. She asked, if tariffs are good for some protected sectors, like steel, "are they backfiring for others?"
Navarro said the jobs will come once the factories are built in six months, a year or 18 months, and said, "We have the credibility high ground here. We just do."
He added, "Steel and aluminum did great during the first term, and there was no negatives."
Froman, who was the last U.S. trade representative under President Barack Obama and worked on the Trans-Pacific Partnership, pointed out that as result of 25% tariffs on steel in 2018, there were 1,000 more steel jobs, but 75,000 fewer manufacturing jobs in fields that used the metal.
Navarro brushed Froman off. "I'm not sure what you're doing here. If you look, for example, in the steel and aluminum industries, we've already seen significant investment commitments." Navarro said he gets letters from small manufacturers all the time saying "thanks for finally being protected from the ravages of unfair competition."
Navarro declined to say whether he believes the 100% tariff threat on Chinese goods will become reality. "Look, as the boss likes to say, let's see what happens." He also said that the current state of trade relations with China is no more tense than it was in 2019.
"Bob Lighthizer and I took a year and a half negotiating with the Chinese, tariffs back and forth," he said. "I don't see this as anything out of the norm."
"These are difficult negotiations, and you've just got to trust in Trump," he added.
He also dismissed a question from Swanson as to whether Trump would lower tariffs in exchange for Chinese investment in the U.S., as he did for Japan.
Someone from Morgan Stanley asked Navarro what businesses would like in changes the U.S. will seek in USMCA, and what they would see as negative.
Navarro said, "Not my lane. It'll be, obviously, a very serious, wide-ranging negotiation." He added, "One of the big concerns that I have is the use of Mexico as a staging area for other countries to essentially evade tariffs and leverage the USMCA" benefits.