Continued from previous pageMembers of the trade community are watching very closely to see whether an expected meeting between President Donald Trump and Chinese President Xi Jinping yields any handshake to calm trade tensions after the Trump administration has accused the Chinese government of stealing intellectual property from U.S. companies and both countries have imposed wide-ranging tariffs on each other.
But China has been obstinate in engaging with the U.S. on a list of dozens of demands the Trump administration provided to Beijing this spring outlining ways it would like to see China move toward a fairer, more market-based economy, and bilateral trade talks have essentially stalled since both sides this spring appeared to be making serious efforts toward reaching an agreement.
Navarro said the United States’ roughly $500 billion trade deficit with China indicates a “pure transfer” of jobs, factories and money overseas, saying the deficit is akin to a “reverse mortgage on this country.”
Instead of involving itself in U.S.-China talks, Wall Street should spend billions in U.S. factory towns needing a rebirthed manufacturing base and an end to opioid addiction, Navarro said, accusing Big Business of contributing to the opioid crisis by offshoring U.S. manufacturing.
“If there is a deal, if and when there is a deal, it will be on President Donald J. Trump’s terms, not Wall Street terms, but if Wall Street is involved and continues to insinuate itself in these negotiations, there will be a stench around any deal that’s consummated because it will have the imprimatur of Goldman Sachs and Wall Street,” Navarro said. “So I would urge these unpaid foreign agents to stand down on this issue.”
The U.S.-China Business Council was not cited in Navarro’s remarks, but one example of recent industry engagement in U.S.-China talks was the group's annual board delegation visit to China, which took place Oct. 10-11.
Members of the board — which includes executives from big U.S. firms like Walmart, General Motors and DowDuPont — met with Chinese officials, company CEOs and academics and stressed that the slow pace of business reform in China is adding uncertainty in the U.S. business community and the members also presented recommendations for de-escalating trans-Pacific tensions, according to a USCBC press release.
During his speech, Navarro also defended the global — with a few exceptions — Section 232 steel and aluminum tariffs, adding that they haven’t brought the “gloom and doom” held by the “conventional, traditional economics profession,” which views tariffs as bad.
On Day One that Trump announced the tariffs in March, Century Aluminum made a $150 million new investment in a Kentucky plant, and U.S. Steel started opening new boilers, for example, Navarro said.
But U.S. lawmakers and industry members have pointed to companies that largely produce downstream products as major U.S. victims of the tariffs, and a company-specific exclusion process administered by the Commerce Department has resulted in thousands of exclusion requests, straining Bureau of Industry and Security resources.
Navarro added that the Trump administration is providing much fewer “Buy American” waivers than the Obama administration, including for procurement projects at the Transportation Department, at which there has been a “radical, radical change” in the amount of waivers dispersed.
“The combination of steel and aluminum tariffs and Buy American policies, using taxpayer dollars, you strengthen the manufacturing and defense industrial base,” Navarro said.
Navarro was asked by discussion moderator Andrew Philip Hunter, director of CSIS’ Defense-Industrial Initiatives Group, about whether onshoring more manufacturing would lead to continued competitiveness of those industries or whether they would need consistent support from the U.S. government.
Navarro said any disbursements from the U.S. government in this vein wouldn’t be “corporate welfare,” but would be “seed money” to get the venture healthy, similar to how a venture capitalist in Silicon Valley, for example, views investment.