Navarro Says 'God Bless Tariffs in the Fly-Over States'
NEW YORK -- Peter Navarro, widely seen as the most protectionist voice in the White House, gave a full-throated defense to what he called “Trumpian economics," as he said tariffs on steel created millions of dollars in investment in Ohio, Wisconsin, Florida and Colorado. "God bless tariffs in the fly-over states," he summed up. Navarro was speaking at an International Trade Symposium co-sponsored by Finastra and The Economist.
Navarro countered the conventional wisdom that trade tensions are causing a global slowdown, and in fact, denied there is investment uncertainty at all. In Asia, he said, companies are certain they should invest in countries outside of China, in Europe, or in the United States. Domestically, he said, the corporate tax cut passed by Congress in the first two years of the Trump administration "sparked a remarkable investment boom." According to the latest Bureau of Labor Statistics figures, business investment fell 1 percent on an annualized basis in the second quarter, though it rose 3 percent in the first quarter of the year.
Navarro praised the U.S. for withdrawing from the Trans-Pacific Partnership, and said the U.S-Japan trade deal provided "virtually all of the benefits" of the TPP "without having to surrender any of our auto parts and auto industry to a gaggle of multilateral partners."
Navarro defended the unilateral approach to China, as he said Europe and Japan are too cowed by China to confront its trade-distorting policies. "By standing up to China the history books will surely note this is one of his great achievements," he said. He dismissed Economist editor Soumaya Keynes' question of what the U.S. could accept in order to end the tariff escalation. Keynes said it's not realistic to expect China to completely end its program of industrial policies and state-owned enterprises.
He responded, "How much of the loaf do you think we should settle for?" He said the size of China's market is the only reason that the business community wants the administration to compromise on its ambitions of curbing Chinese abuses, saying, "If South Africa did that, you’d crush them like a bug, right?"
Navarro argued for a trade bill (see 1908090034) that would give the president unlimited power to raise tariffs on trading partners to match those partners' tariffs. That trade bill is unlikely to get through Congress.
Asked why General Motors is still choosing to close factories in the U.S. after the administration's efforts to bolster auto manufacturing through the NAFTA rewrite, Navarro said that the administration is trying to find more uses for the Lordstown, Ohio, factory complex than the battery plant venture that has already been promised. An electric delivery truck startup is also considering the site, and Navarro said the administration is trying to make sure that could "be a viable enterprise. That's going to be good [United Auto Worker] jobs. He said it won't take a year for these enterprises to launch. "In a matter of months we should have some good news on that," he said.