China critic set to assume more influential role in Trump White House

Reporting from Washington —  Once sidelined inside the White House by more moderate voices on trade, Peter Navarro, the noted China critic, is set to re-emerge as a more influential member of the Trump administration, just as the president is gearing up to take potentially punishing economic actions against Beijing.

Navarro, a former longtime UC Irvine professor, is expected to be named assistant to the president, a promotion that would place the Harvard-trained economist among the ranks of top-level policy advisors, according to a person familiar with the matter.

Trump’s decision to give Navarro a higher rank, first reported by the publication Inside Trade, comes as the president faces an April deadline to determine whether to impose tariffs and other measures to restrict imported steel and aluminum from China and other nations.

The Trump administration is also considering more sweeping penalties on China for alleged theft of intellectual property and forced technology transfers.

Navarro was a top economic advisor to Trump during his campaign in 2016, providing the economic rationale for Trump’s fiery rhetoric that called for overhauling free-trade deals and tariffs of 45% on Chinese imports.

“They may be preparing for stronger tariffs, so he’d be the natural one to represent the White House,” said Derek Scissors, a China economic analyst with the American Enterprise Institute.

White House spokeswoman Natalie Strom declined to comment, saying she had no “personnel announcements to make at this time.”

Navarro, who has written such provocative books as “The Coming China Wars” and “Death by China: Confronting the Dragon — a Global Call to Action,” was an architect of Trump’s campaign white paper on economic policy, along with now-Commerce Secretary Wilbur Ross.

After Trump’s victory, the president appointed Navarro head of a newly created White House National Trade Council. But that office dissolved after a few months, and Navarro was relegated to a role subordinate to the National Economic Council and its director, Gary Cohn, the former Goldman Sachs president whose more favorable positions on trade clashed with Navarro’s nationalist stance.

The new rank could allow Navarro to bypass Cohn and once again report directly to Trump.

White House officials have downplayed the apparent conflicts between the administration’s economic nationalists and the so-called globalists. The latter group worries about the economic risks of a hard-line approach that could trigger a trade war, especially with China, the world’s second largest economy and America’s top trading partner.

Trump has somewhat moderated his rhetoric on trade since taking office even as he has often given conflicting signals about how he might deal with China. On Monday, speaking to state governors meeting in Washington, Trump again praised Chinese President Xi Jinping while insisting that the United States cannot tolerate lopsided trade with China.

“I think that President Xi is unique. He’s helping us with North Korea,” Trump told the governors.

“China’s been good, but they haven’t been great,” he added. “China has really done more, probably, than they’ve ever done because of my relationship. We have a very good relationship, but President Xi is for China, and I’m for the United States.”

“We probably lost $504 billion last year on trade” to China, Trump said. In fact, Chinese imports last year were more than $505 billion, but the United States also exported $130 billion in goods, resulting in a merchandise trade deficit of about $375 billion. In addition to Trump’s tendency to get the numbers wrong, economists have repeatedly noted that running a trade deficit does not mean that the U.S. has “lost” money — cheap imports have been a major factor in U.S. economic growth even as they have wiped out some manufacturing jobs.

Trump’s mantra on trade has been “fair and reciprocal trade,” and his aides are trying to renegotiate the North American Free Trade Agreement and the United States’ trade pact with South Korea.

Navarro has blamed trade deals like NAFTA and the one with South Korea for weakening the American economy, and Trump and Navarro have shared the same critical view of Chinese economic policies and the World Trade Organization.

“Peter has shown staying power,” said Scissors. Although he was seen as marginalized in the administration, Navarro always seemed to have a voice at the table, he added.

“Peter’s influence comes from the fact that the president tends to agree with him,” he said.

[email protected]

Follow me at @dleelatimes