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Trade adviser ascends in Trump White House

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Trade adviser ascends in Trump White House

One must only watch a few minutes of Peter Navarro’s economic hyper-nationalist film “Death By China” to understand why President Trump has an affinity for the man.

In the movie’s opening scenes, a flag-painted cut-out of the United States map tumbles to the ground and is brutally stabbed with a knife.

As the map gushes blood, the knife’s handle is revealed to bear a Chinese currency note, and its blade is inscribed “Made in China.” 

Later, animation portrays China as attacking American factories with artillery labeled “currency manipulation” and bombs labeled “illegal tax subsidies.”

The term “American carnage” comes to mind as the factories explode, leaving smoldering craters in their wake.

Navarro, now the 68-year-old director of the White House National Trade Council, sees eye-to-eye with Trump on the need for tough, protective tariffs to insulate American jobs and swat down the meddling tentacles of China’s aggressive economic policy.

He scored a major victory this week, as Trump ignored large swaths of his own party and his other advisers and unfurled steep, broad-based tariffs on steel and aluminum.

Increasingly, Navarro has the president’s ear.

“This is the president’s vision. My function, really, as an economist is to try to provide the underlying analytics that confirm his intuition. And his intuition is always right in these matters,” Navarro told Bloomberg news this week.

When Navarro was brought onto the Trump campaign in 2016, he was the only economist on the team. But his academic work was unrelated to the views he espoused on trade.

“When he started out, his field was energy economics, and he published with good journals,” said Amihai Glazer, a professor of economics at University of California Irvine, where Navarro spent decades teaching at the business school.

At that early point in his career, the Harvard-educated economist was working as an analyst for the Department of Energy. He won the endorsement of the Sierra Club, an environmental group, in his failed run for San Diego mayor in 1992. 

Navarro made several attempts at office, including a bid for Congress and a local city council seat, running as either an Independent or a Democrat. He always fell short. Around the time of his last electoral bid in the early 2000s, Navarro started turning his attention to broader economic issues, with a special focus on China.

“He went into macroeconomics, and I don’t think any of his work was published in what are considered good journals,” Glazer said. “The work on international trade and policy toward China is not really academic work. It’s polemical.”

Glazer’s view is widely shared among economists, who have by and large excoriated Navarro’s views on trade. The Economist magazine accused him of “dodgy economics.” 

Greg Autry, a University of Southern California professor who co-authored the book version of “Death by China” with Navarro, says the criticism is overblown.

“Although Navarro’s thoughts are considered out of the mainstream, that’s because nobody wants to fund those thoughts,” he says. “I don’t know that Peter’s thinking is unusual, it’s just that that thinking is hard to get to the forefront,” he adds. 

It was Navarro’s China-bashing that got him noticed by Trump advisor and son-in-law Jared Kushner in 2016, and led him into the campaign and subsequently the White House. 

In his early days there, his influence waned as ideological foes such as National Economic Council director Gary Cohn successfully sidelined him.

Now, with Cohn’s impending departure in protest of the new tariffs, Navarro and his views are ascendant at the White House, a prospect that has unnerved many Congressional Republicans.

“I think he’s been ‘the’ influential person,” said Rep. Mark Walker (R-N.C.), the head of the conservative Republican Study Group, which opposed Trump’s tariff decision. “I think you saw with Cohn’s decision which way the president was leaning in terms of who he considers his advisor on this issue, which sets a potential precedent for future concerns as well.”

Sen. John Thune (S.D.), the number-three Republican in the Senate, fretted that Navarro gives the president bad advice.

“His views on trade are completely out of step with the modern world and global economy in which we compete, and represents a school of thought on trade that’s very outdated, and if implemented would be very harmful to America’s economic interests,” Thune said.

Democrats are also concerned.

“Navarro on the outside as a critic was helpful. On the inside doing policy, I’m not so sure,” said Rep. Richard Neal (D-Mass.), the ranking member of the House Ways and Means committee, which oversees trade.

Autry dismisses the criticism as part of a corporate-driven worldview that has infected both parties.

“Certainly he’s not proposing anything much different that what the Chinese and Koreans are doing very successfully in terms of investing in their manufacturing. But if you’re an investment banker from Goldman Sachs, you’re a lot concerned about your quarterly profits than selling off a factory and its parts to China,” he said.

Cohn is reportedly doing all he can to ensure that his replacement subscribes to mainstream views, pushing for the NEC’s Shahira Knight to take over. But Navarro is reportedly lobbying for the role of chief economic advisor.

Maybe this time, he’ll win.

 

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