Trump Pivots Toward Trade Wars With Promotion Of Trade Uber-Hawk Peter Navarro

Trump is officially on a trade war path.

Defying threats of retaliation from the Chinese, on Friday Bloomberg reported that President Trump was pushing for the "harshest possible" global tariff of 24% on all steel imports and 10% on aluminum, a decision that would anger nearly every industrial manufacturer based in the US, while at the same time helping revive the fortunes of US steel producers. The rates were first proposed by Commerce Secretary Wilbur Ross last week.

Now, two days later, in the latest and clearest indication yet that Trump will not back down from the coming global trade wars, the WSJ reports that the president plans to promote his advisor Peter Navarro - also known as the author of  "Death by China" and "Crouching Tiger: What China's Militarism Means for the World" and an unrepentant trade hawk, best known for his protectionist views on trade policy and giving economic nationalists a stronger voice in internal debates as the Trump administration nears decisions on high-profile trade issues.

Peter Navarro, an economist who helped shape Donald Trump’s 2016 protectionist campaign platform, will be named an assistant to the president, according to a person familiar with the matter.

Navarro, who one year wrote a WSJ  Op-ed in which he warned that deficits "Could Put US National Security In Jeopardy", began Mr. Trump’s presidency with broad influence and regular access to the Oval Office but his role was quickly limited after he clashed with the aides who oppose his views on trade deficits and multilateral trade agreements.

Navarro was originally made head of a newly created National Trade Council, but was given little staff. That was eliminated in April and he was instead made head of a new Office of Trade and Manufacturing Policy that was seen as having little influence and was ultimately made to report to Gary Cohn’s NEC.

As such, his sudden "reincarnation" within the Trump circle of trust likely indicates that the influence of Trump's Wall Street-based globalist wing - Gary Cohn and Steven Mnuchin - is waning, and comes as the White House is nearing decisions on several high-profile trade matters (one almost smells an off the record phone call between Trump and Bannon here).

Meanwhile, with the Trump administration facing an April deadline on whether to impose broad-based steel and aluminum tariffs in the name of national security, Navarro's promotion will be certain to tip the scales in the direction of trade war. 

Navarro has been a strong advocate of the view espoused by Mr. Trump—and rejected by most mainstream economists—that big trade deficits are, per se, bad, and that trade policy should be crafted to try to slash imbalances. Incidentally, Navarro may be on to something - despite the recent slide in the dollar, US net trade has failed to catch a boost, and as the chart below shows, the US Trade deficit excluding soaring petroleum exports, just hit an all time high!

And with US officials also completing an investigation on widespread complaints that China improperly forces U.S. companies to turn over valuable intellectual property, a probe that is expected to result in significant economic sanctions against Beijing, it is safe to say that US-Chinese trade relations are about to hit rock bottom.

It is unclear exactly how Mr. Navarro’s role will change, but the promotion is likely to give Mr. Navarro a more regular role in trade debates and meetings at the White House, according to the person familiar with the matter, a trade expert who has discussed the move with White House officials.

“This gives Peter a more formal seat at the table when trade and manufacturing policies are discussed,” the WSJ source said. “That’s something that has been in question the last six months.”

The WSJ adds that the appointment would make Mr. Navarro one of about two dozen “assistants to the president” in the Trump administration. Other officials with that title include the White House legal counsel and the heads of the various White House policy councils.

Early in the administration, Navarro came close to persuading Trump to withdraw from the North American Free Trade Agreement with Mexico and Canada and a separate agreement with South Korea, until he was stymied by Mr. Trump’s more globalist-minded advisers, led by Gary Cohn. Both are now being renegotiated. Early in 2017, Navarro also roiled currency markets by publicly accusing Germany of unfairly manipulating the European currency to boost exports.

“The change in his stature is a sign that the promises the president made on trade and manufacturing are more likely to be implemented,” said Michael Wessel, who advises labor unions and serves on the U.S.-China Economic and Security Review Commission, a congressional advisory panel.

So while it took capital markets about 17 years to realize that the US has "double deficits" - the most frequent argument cited for the recent plunge in the dollar, even though the US has not had a C/A or fiscal surplus since about 2001... 

... we wonder how long it will take to figure out that trade wars are coming, and that they are not exactly good for either risk assets or risk-parity and vol-targeting funds...

Comments

MK ULTRA Alpha Stuck on Zero Sun, 02/25/2018 - 23:03 Permalink

If China loses the US market, it represents 18% of the Chinese export economy.

The Chinese have been changing the rules for US firms operating in China, this strict treatment will cause a slow down in US investment in China. We could possibly see an exodus of US firms from China.

A loss of 18% of China's export market means China is unable to service it's debt, both foreign and domestic debt. The Chinese would buy time by selling off the $1 trillion US debt and foreign exchange and use the huge stockpile of war reserve crude oil which was recently purchased and stored, to keep the machine humming. If not, famine returns to China. (remember the Chinese bought crude oil for storage when it was dirt cheap, this was over a two year period, there are many estimates of how much crude oil China bought in preparation for war.)

The only thing holding China back from annexing East India and using it's proxy Pakistan against India is the US China trade. The Chinese can't afford to lose the 18% US export market. However, anyone and everyone can see the Chinese are aggressively moving south against India, South China Sea, and on the opposite flanks Taiwan and Japan.

One Belt, One Road is forcing nations into the Chinese mercantile imperialism economic model of raw materials imported to China and finished goods exported from China. This mercantile imperialism drive is leading to a trade war. The end of the China trade to the US will hasten a real war. There will be no loss to the Chinese for going ahead with military conquest of new fertile regions for Chinese expansion and don't forget the crude oil and natural gas fields to the south of China. Australia is a primary target of this expansion. (the Chinese believe it absurd 28 million people are in Australia and they're packed into a narrow coastal plain. the Chinese visit Australia all the time in preparation of taking it over, they even say on social media, Australia belongs to China.)

So buckle up as the China trade comes to an end, the US can no longer afford to have $500 billion annual trade deficits with China.

 

In reply to by Stuck on Zero

Endgame Napoleon MK ULTRA Alpha Sun, 02/25/2018 - 23:42 Permalink

By shifting production overseas, US companies have helped to build up the Chinese military, while weakening the US middle class and the SS trust fund, which would be in a better position for the Baby Boom retirement if US factory workers were paying into the system. Instead, we have over 2 million production jobs, off-shored by American companies that “value diversity” to nations with lots of cheap, non-diverse labor.

We can’t go near that topic, though, or war will break out. How convenient for those wanting to stay on the cheap-labor train. It is like a child saying he will stomp his feet and throw a tantrum if you do this or that.

So, China — with its massive population — will starve without offshoring, even though economists justify welfare-supported immigration that undercuts the wages of American workers by telling underemployed citizens that a huge population is crucial for economic growth. It seems like more of a liability if we are to believe that the massively populous country of China will starve if they lose exports. 

How about this problem that will be hard for them to blame on America: automation. Will the Chimese starve when bots start replacing humans on the assembly line?

Here is the solution of American politicians.

Get as many women into the workforce as you can, with the government paying many of them to have sex and reproduce while working part time, creating a maximum number of current and future humans to compete with robots for increasingly automated jobs.

As jobs become more and more part time, add millions of immigrants to the workforce per year, likewise tolerating mass waves of illegal immigration, paying most of the immigrants, too, to have sex and reproduce through elaborate monthly welfare and child-tax-credit welfare systems. Create more humans to compete with automated labor.

Maybe, the Chinese can continue to blame underemployed, American workers for FINALLY standing up for their jobs while following the nutty, pay-per-birth economic plan of our globalist leaders to avoid starvation.

Thing is, if automation proceeds as it seems to be, mass starvation and competition from America’s [human] workers will be the last of China’s worries. Japan already has 100% robot-staffed farms in skyscrapers. 

In reply to by MK ULTRA Alpha

MK ULTRA Alpha Endgame Napoleon Mon, 02/26/2018 - 02:15 Permalink

Good comment and good logic, deserving of more thumbs up for telling it like it is, not the way the half baked snowflakes, Russian trolls and communist foreigner anti-American trolls and don't forget the 300,000 Chinese spies in the US, and the armies of Chinese Cyber trolls operating in the US and those state sponsored and non-state sponsored hacking our minds all the way from China, and the ethnic born in the USA Chinese trolls are pro-Chinese and loyal to China and must obey China even though they're born in the USA. This is official Chinese policy, according to Chinese imperial leader Xi.

Communist dictator for life, they're changing the rules for Xi to be Dictator for Life. A new wave modern reincarnation of Mao, with Stalinist over tones, with a lot of money and no need for so many people. Xi is a hard core old style communist party boss and one of the last of the Mao era. This man has seen famines and has commented about it several times, if there is a famine in China there will be war.

Xi's plan is if there is economic upheaval then he will launch wars to the south of China. This will redirect the mass' anger against an external enemy instead of the Chinese Communist Party. China's population of over 1.4 billion Chinese must be fed.

War is coming and we must prepare to survive.

In reply to by Endgame Napoleon

uhland62 Sun, 02/25/2018 - 22:24 Permalink

Now we understand why Xi wants a longer tenure. With a real war following the trade war he seems to think that an experienced hand could handle that better. 

MusicIsYou Sun, 02/25/2018 - 22:24 Permalink

Oh just fire up those war machines because this is where all this goes.  Sometimes you just have to kill 100's of millions of people.  Don't be so shy,  most of the time it comes down to a bullet in their head. There's not an infinite amount of resources. Hey, God has killed billions of people,  you just have to kill a motherfckrr. 

dirty fingernails Sun, 02/25/2018 - 22:30 Permalink

Trump and his merry band of looters are gonna get schooled. The best part is that any pain will only be felt by us peons! Mnunchin's wife might not be able to get 4 furs this year (which is a human rights violation, ya know)

dirty fingernails dirty fingernails Sun, 02/25/2018 - 23:36 Permalink

Go ahead and down vote me. That doesn't change that all the manufacturing machinery is in China, or that the skilled labor has either retired or become a Heroin Hero from hopelessness, it doesn't make inflation be in check, it doesn't make wages increase, it doesn't make people stop shooting up crowds, it doesn't change that the dollar is being phased out globally, it doesn't make the unpayable debt stop exploding, it doesn't make the US population any less fractured, petty, or apathetic, it doesn't make the world any more willing to be abused abd pushed around by a man-child who has Hillary-fits when he doesn't get his way.

I'm not here for the upvotes.

In reply to by dirty fingernails

Theta_Burn Sun, 02/25/2018 - 22:31 Permalink

I wish Trump all the luck in the world.

But for a country that doesn't even make light bulbs for themselves anymore, he may want to employ a little more....tact.

MusicIsYou Sun, 02/25/2018 - 22:35 Permalink

Thou shall not kill souls.  There now it's complete.  Feel free to put a bullet in their head. There's no infinite amount of resources,  you have to put a bullet in their head, or nuke their assets. You homosexuals could never replace me, you'd Fck your best friend in the asshoIe if he shaved his asscrack.    I'll blow Yellowstone park and kill all you sonsofbitches if you don't act. 

roddy6667 Sun, 02/25/2018 - 22:57 Permalink

I don't vote, but if I did, the only reason I saw to vote for Trump is that he is less likely to start a major war. Not true now. He has surrounded himself with bloodthirsty Kosher Neocons and saber-rattling giants of the military-industrial complex. If they don't destroy the country in a war, they will bankrupt it with military spending.

Not much hope there.  

soyungato Sun, 02/25/2018 - 22:58 Permalink

So US Steel is going to make a shit load of money selling to US manufacturers who uses steel and aluminum like Boeing and GM. Can Boeing and GM compete with the outside world ? May be that extra 50 billions to the pentagon will allow them to buy more expensive jets and tanks.

AmarUtu Sun, 02/25/2018 - 23:00 Permalink

A real war will never be needed, when you have the power to starve a billion people guns are not necessary.

So now it becomes about national security, this is basically what is made in China that is required for national defense. Those products will need to be secured locally.

Then and only then can the US stand again from a position of absolute power.

Then demands must and will be met. But until that time comes, the US is at a massive strategic disadvantage.