White House Adviser Navarro On Why U.S. Hit China With More Tariffs

NPR

Tuesday, September 18, 2018

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The Trump administration is imposing $200 billion in new tariffs on China, which plans to retaliate. Steve Inskeep talks to White House adviser Peter Navarro about the escalating trade war.

Transcript

STEVE INSKEEP, HOST:

On this morning after, President Trump imposed another $200 billion in tariffs on China - tariffs on $200 billion worth of goods from China. We've called Presidential Trade Adviser Peter Navarro. He's on the phone. And if I understand this correctly, he's underneath an awning outside the White House in the rain. Is that is that right, Mr. Navarro?

PETER NAVARRO: That's exactly right, Steve.

INSKEEP: What triggered this move by the president now?

NAVARRO: Oh, there's no sudden aspect to this. The origins of this, Steve, is the fact that China steals our intellectual property. They force the transfer of that intellectual property. They invade our export controls. And then once they basically cheat us, they use all that money to acquire our technology, our crown jewels. And so months and months ago, we launched the second 301 investigation by U.S. Trade Representative and imposed an initial tariff of $50 billion primarily on high-tech goods that China was targeting. China retaliated. And so in response to that, the president directed the USTR to go through the process meticulously of preparing the additional tariffs.

INSKEEP: Two-hundred-billion dollars worth of goods - there already were $50 billion worth of goods. According to the president's statement, the president is saying if China retaliates, you're going to go ahead and do the other $267 billion worth of Chinese goods. And China is already saying they're going to respond. Is it a guarantee then that there is another wave of tariffs coming from the United States?

NAVARRO: So, Steve, this is all up to China. If China stops their unfair trade practices, it's over.

INSKEEP: But they're saying they're not - but they're saying they're not changing. They're going to retaliate. So does that trigger your threat of retaliation against them?

NAVARRO: The president was crystal clear in his statement. If China retaliates, the process will move forward on the additional amount. Now, to put that in perspective for your listeners, China exports to us about three times as much as we export to them. And the big problem, Steve, is they cheat. They have high tariff barriers. They have high non-tariff barriers. They use an enormous amounts of illegal subsidies to flood our markets. And so this is what this is about. And I think most of your listeners - maybe all of your listeners understand that China's been basically getting away with cheating us.

INSKEEP: Well, there's widespread agreement that the U.S. feels it has very legitimate concerns here. And that's a bipartisan concern. The question is now who gains or loses, who benefits, who is punished, who pays more when you're imposing tariffs. Now we had on the program today Jake Parker. He's with the U.S. China Business Council. He's in Beijing. So he's representing U.S. companies doing business between the United States and China. And he mentioned the possibility that, as tariff barriers rise, U.S. companies would like to find other sources for their products besides China. But it's really hard. Let's listen to some of that.

(SOUNDBITE OF ARCHIVED BROADCAST)

JAKE PARKER: One member that sources televisions in China recently told me that, in response to the threat of the 200 billion in tariffs, the company had begun due diligence on shifting purchases to other countries. The reality is that capacity is key. The production capacity of the rest of the world combined falls short of the television-manufacturing capacity in China.

INSKEEP: Wow.

PARKER: It makes it extremely difficult to shift production away from China in the short to medium term.

INSKEEP: So that's Jake Parker. Now, Peter Navarro, I'm thinking this through. If U.S. companies can't get products elsewhere than China, that means they still buy stuff from China. China still gets their profit, still gets its money, and U.S. consumers just pay more because of the tariffs. Isn't that right?

NAVARRO: Well, let me point out that you have a special interest, citing a fact that's not in evidence asserting something that may or may not be true.

INSKEEP: Oh, you think there's plenty of television-producing capacity outside of China?

NAVARRO: The South Koreans will be delighted to up their production. The Vietnamese will be delighted up their production. And we - look. Here's the thing. In response to these tariffs, we'll also see more investment here in the United States. We'll see more production here in the United States. We'll see our wages go up. So I think just focusing on consumer effects or these kinds of scenarios by anecdote is the wrong way to look about at this.

INSKEEP: But along the way, should American consumers and farmers and others be ready for pain? I'm thinking of Winston Churchill in World War II, who was very frank with the British people, that they were going to suffer blood, toil, tears and sweat. It was going to be a really bad time on the way to victory. Are you willing to level with Americans that what you're doing on trade is going to cause a lot of pain even though you believe it is ultimately worth it?

NAVARRO: No, I disagree with your hypothesis. I'm totally on board with your Winston Churchill analogy in terms of China. But in terms of this pain you're imagining, this economy is doing great. Wages are going up. The effects of these tariffs will be negligible from a macro point of view. And the market - the stock markets are reflecting that. And by the way, this president has done an enormous amount of things to help American farmers, including getting them money to help them work through this. And God bless Winston Churchill and Donald J. Trump.

INSKEEP: (Laughter) OK, Peter Navarro, I'll let you get in out of the rain. Thank you very much for taking the time. I really appreciate it.

NAVARRO: Steve, it's always good to talk to you.

INSKEEP: That's White House Trade Adviser Peter Navarro, a bit earlier this morning. Transcript provided by NPR, Copyright NPR.

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