Navarro: Section 232 Investigations Planned for Medicines, Critical Minerals
Peter Navarro, a trade adviser to President Donald Trump who was known as a China hawk when he served in the president's first administration, said the Commerce Department will be conducting Section 232 investigations on how the steel and aluminum actions should be adjusted, and how imports of critical minerals and essential medicines "are harming [our] ability to produce" those goods.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
"Everything we do is going to be data driven," he said.
Navarro offered some clarity to a Trump statement last year that the commerce secretary would "lead our tariff and trade agenda, with additional direct responsibility for the Office of the United States Trade Representative."
Navarro said Howard Lutnick, who has not yet been confirmed to head the Commerce Department, will lead on Section 232 issues, Treasury Secretary Scott Bessent will handle questions of currency manipulation and restrictions on foreign investment in the U.S., and the new U.S. trade representative, Jamieson Greer, will take point on the USMCA review.
Mexican politicians are already thinking of how to be aligned with the U.S. on that review. According to the Wilson Center, Mexican Senator Waldo Fernandez, who leads the Mexican Senate's USMCA Oversight Committee, said trade triangulation, customs fraud and unfair practices by China and other Asian exporters who don't contribute enough to the region are challenges, and said there should be stronger mechanisms in the FTA "to ensure that its benefits stay within the bloc."
Navarro said America was built on tariffs, and said "tariff revenues are going to play a very important role" in paying for tax cuts, and said the tariffs are going to pay for Trump's promise to make tip income exempt from taxation. He added, "You can take that to the bank."
"If President Trump succeeds like he wants to succeed, we are going to structurally shift the American economy from one over-reliant on income taxes and the Internal Revenue Service, to one which is also reliant on tariff revenue and the External Revenue Service," he said.
Navarro didn't say who would lead on determining whether a universal tariff is the best way to remedy persistent trade deficits in goods, but the America First Trade Memo, which he said is the road map for all trade policy, said Lutnick would lead that investigation. He also declined to say whether FTA partners would be spared from a global tariff.
"We run a one trillion dollar annual trade deficit," Navarro said, blaming it for shuttered factories. He added that deficit means foreigners are buying a trillion dollars' worth of American assets (stocks, bonds, real estate, businesses). "And we do nothing about that." The consequences of that are millions of jobs lost, he argued.
He said that while there is a possibility of global tariffs to respond to that deficit, "we gotta be measured about it."
Navarro, who spoke at an event on trade hosted by Politico on Feb. 4, said, "America is the world's sucker."
Navarro didn't link the tariff threats against Mexico and Canada to their trade deficits, and said repeatedly: "This is a drug war, this is not a trade war." When pressed on why Canada was in the crosshairs, given that very little fentanyl has been seized at the northern border, Navarro pointed to Canadian fulfillment centers for e-commerce orders from China.
"De minimis -- this is the buried lead," he said, referring to the point of the story that should be in the first paragraph of a news story. Other countries only allow $30 or $20 duty-free import thresholds, he said, not $800.
House Ways and Means Chairman Jason Smith issued a statement on the end of de minimis eligibility for Chinese packages, saying, "The effect of increased abuse of the de minimis privilege has been to deny the U.S. Government collection of billions of dollars in additional revenues while unfairly disadvantaging American manufacturers. The Trump Administration is leaving no stone unturned when it comes to restoring some backbone to America’s trade policies."
The Coalition for a Prosperous America praised Trump for removing China from de minimis, but urged him to go further.
"The de minimis loophole is fundamentally incompatible with a secure trade policy that prioritizes national and economic security," the group wrote. "The de minimis loophole overwhelms our ports, rewards bad actors, and cripples U.S. manufacturers and producers who have to compete against a flood of untaxed imports. If we are serious about reindustrializing America and securing our supply chains, we must close this loophole for all countries—not just China."
Consistent with the drug war language, Navarro said what would be examined over the next 30 days, to see if Canada and Mexico would be spared the tariffs, would be migration, repatriation and drug smuggling data. He said that Secretary of State Marco Rubio; Stephen Miller, an architect of Trump's immigration policy; and Homeland Security Secretary Kristi Noem would be involved in the discussions and negotiations.
Navarro said the lesson businesses and citizens should take from the last 48 hours was to trust Trump. "When it looks like things are a little chaotic, it's genius."