All Eyes on Peter Navarro to Reshape US Trade Relations With China

Former academic seeks a more confrontational approach to an aggressive Chinese regime
March 13, 2018 Updated: March 18, 2018

President Donald Trump’s chief trade adviser, Peter Navarro, known for espousing a hardline view toward U.S. relations with China on trade and other issues, is set to have an even greater influence on the administration following the departure of another top economic adviser who favors a conciliatory approach to China.

The March 6 resignation of Gary Cohn, who served as the director of the National Economic Council from the beginning of the Trump presidency, was reported to have been triggered by Cohn’s confrontation with the president in the Oval Office over Trump’s decision to impose steep tariffs on steel and aluminum.

Cohn, a former Goldman Sachs banker and a supporter of the existing trade system, has been in a yearlong feud with Navarro, one of the administration’s most prominent figures pushing forward Trump’s campaign promise to reshape U.S. trade relations with China.

Cohn’s departure could signal a dramatic comeback for Navarro, who, for a period of a few months last year, almost faded away from public view as the National Trade Council he directed was disbanded and subsumed under Cohn’s office in April. The move was interpreted by many as a sign that Cohn’s faction had gained the upper hand in the internal struggle in the White House.

At least two sources who maintained close contact with Navarro told The Epoch Times last year that he was under a lot of stress, but was persisting to counteract those in the administration who “profited from doing business with China.” With Cohn out of the picture, observers now say that Navarro will have a larger role to play in shaping the administration’s policies.

Views on China

What changed the balance of power inside the Oval Office was likely not just the dispute over tariffs on steel and aluminum, but the fact that the new White House National Security Strategy, which specifically designated China as a strategic rival, resonated with Navarro’s long-held view that China is expanding not just militarily but also economically to challenge the United States.

Navarro, a Harvard-trained economist and former University of California–Irvine professor, has been dubbed by some as “the most unpopular economist” for his unorthodox views toward China. Prior to joining the Trump campaign in 2016, Navarro was best known for his books “Death by China” (coauthor Greg Autry) and “Crouching Tiger” (coauthor Gordon G. Chang), both of which were made into documentary films that have been widely viewed. Both books warn of the need to counter an aggressive China.

In “Death by China,” Navarro argued that China’s economic rise through the international trade system has failed to make China into the more free and open society that many in the West had hoped for. On the contrary, it has allowed the Chinese regime to harness and exploit the benefits of the U.S.-led trade system while at the same time creating a better-financed, better-equipped authoritarian state that is now committed to military expansion and aggression around the world.

Many economists dismissed Navarro’s publications that are critical of U.S.–China trade relations as being merely polemical rather than scholarly work, while others said that Navarro had from time to time exaggerated the facts to suit his narrative, such as making the accusation that China is still undervaluing its currency.

Nevertheless, Navarro’s views are said to have influenced Trump through the years and are now widely echoed by officials in the Trump administration.

‘Not Taking It Anymore’

“The World Trade Organization created China,” Trump said to thousands of attendees at the Conservative Political Action Conference on Feb. 23, clearly endorsing Navarro’s wary view of the WTO. “China has been a rocket ship since. And now, last year, we had almost a $500 billion trade deficit with China.”

Navarro told CNN on March 4, “What I think the president wants to do in terms of the World Trade Organization is to send a very strong signal … that we are not going to take it anymore.

Navarro argued that China’s economic rise through the international trade system has failed to make China into the more free and open society that many in the West had hoped for.

“A lot of the problem has been the World Trade Organization, which has over 160 countries, and a lot of them simply don’t like us.”

Having succeeded in imposing punitive tariffs against China on steel and aluminum, Navarro now wants to punish China for its intellectual property theft against the United States. A senior White House trade official has said that the next step in leveling the playing field on trade with China will be to stop it from forcibly eroding America’s technical edge even further, as reported by the Washington Free Beacon.

“China is a very bad actor when it comes to trade practices across a lot of things, but nothing’s more important in the near-term than addressing the theft of our intellectual property and the forced technology transfer of our technologies,” Navarro said on Fox Business Network.

Workers load cargo on ships at a port in Nantong in China’s eastern Jiangsu Province on March 9. (AFP/GETTY IMAGES)

While Navarro’s view still remains a heterodox one among the majority of economists, an increasing number of experts in national security have also begun to question the nature and intention of China’s economic relations with the United States and the world.

“Despite their rhetoric, China’s leaders regard trade and investment as domains of strategic competition rather than simple ‘win-win cooperation,’” said Aaron Friedberg, a professor at the Woodrow Wilson School of Princeton University, in a testimony before the House Armed Services Committee on Feb. 15. “There is very little evidence that … they intend to abandon their present approach.”

For his part, Navarro does not limit his pushback against China to the economic sphere. He has successfully convinced Trump to sign an executive order requiring a broad review of the nation’s defense industrial base, a move that echoed the concerns of many that the U.S. defense industry is not robust enough to deal with China’s military rise.

 

Recommended video:

WATCH: Death by China – How America Lost Its Manufacturing Base

*Note from the director, professor Peter Navarro: As you watch this film, it is important to always distinguish clearly between the good and hard-working people of China, and their repressive communist government now victimizing both American and Chinese citizens alike.