President Donald Trump’s reversal on labelling China as a currency manipulator, as well as an overall softer stance toward a country he routinely lambasted on the campaign trail, have raised new questions about the role of a top member of his Cabinet.
Peter Navarro, the head of the newly formed White House National Trade Council and a top economic adviser to Trump, was believed to be quite possibly the most influential member of the West Wing when it came to matters of international trade, particularly involving the Chinese.
An outspoken China hawk, the ex-professor authored books such as “Death by China” and “Crouching Tiger: What China’s Militarism Means for the World.” He advocated for a much more aggressive stance against the Asian superpower. He believed, much as Trump expressed along the campaign trail, that China was responsible for a glut of manufacturing jobs exiting the US, pointing to China’s manipulating of its currency as a top reason for why that was such.
In the White House, Navarro was set to be Trump’s right-hand man in alliance with Commerce Secretary Wilbur Ross and US Trade Representative nominee Robert Lighthizer. Together, advocates believed they would wage a major economic battle against China. Navarro already believes that China is engaged in an economic war against the US.
But Trump’s recent comments sent a shockwave to watchers of the Trump-China relationship and made them wonder if Navarro’s influence has been limited.
And the comments made it appear as if Navarro’s influence was being limited.
“What is left for him to do?” one top Republican operative on matters of trade told Business Insider of Navarro. The operative said it’s becoming clear that head of the National Economic Council and ex-Goldman Sachs executive Gary Cohn is exerting increasing influence in the trade policy realm.
The operative suggested that while Trump’s comments will be viewed as a “betrayal” to his trade supporters, the move against labelling China as a currency manipulator makes sense — as trade, he said, is the “only” negotiating tool Trump has it his disposal regarding China and North Korea.
The appearance of Navarro’s profile becoming more limited comes at a time when an apparent power struggle is playing out in the White House. The “Goldman Sachs” wing of New York businesspeople — Cohn, senior adviser Jared Kushner, assistant Ivanka Trump, and Deputy National Security Adviser Dina Powell — has sparred with the more populist, nationalist wing headed by chief strategist Steve Bannon. Navarro’s views on trade fit in more with the Bannon wing, which has seemingly lost some of the power it held at the start of the Trump presidency.
According to a recent story in Vanity Fair, Navarro was brought into the Trump orbit by Kushner, who contacted the professor after browsing Amazon for a book that seemed to match Trump’s views on China. Trump has commissioned Kushner to find someone to speak with on China, and Kushner stumbled upon “Death by China.” In announcing Navarro’s hiring, Trump said in a statement that he “read one of Peter’s books on America’s trade problems years ago and was impressed by the clarity of his arguments and thoroughness of his research.”
“He has presciently documented the harms inflicted by globalism on American workers and laid out a path forward to restore our middle class,” Trump’s statement said. “He will fulfil an essential role in my administration as a trade adviser.”
Lee Branstetter, a Carnegie Mellon University professor who served on President Barack Obama’s Council of Economic Advisers from 2011 through 2012 who is opposed to many of the trade proposals championed by both Trump and Navarro, said Navarro hasn’t appeared to have had much say in trade policy thus far.
“It certainly does seem to be the case that Peter Navarro is not going to have the kind of impact on trade policy that we might have expected based on the campaign rhetoric, or even what Peter himself might have expected when he accepted this position to head this new council within the White House,” Branstetter said.
But Branstetter said this could stem from how little power Navarro’s council has among the many White House agencies.
“Lots of administrations start lots of little councils inside the White House to address various constituencies, and many of them are quite small and quite under resourced,” he said. “And in the interagency game of jockeying for power and influence, these little councils can also be at a grave disadvantage, relative to the big agencies and the more established consultative councils within the White House, like a National Security Council or a National Economic Council.”
“I worked for a White House that was very different from the Trump White House, but this phenomenon of lots of little councils that weren’t necessarily doing a whole heck of a lot was certainly a feature of the Obama administration and probably in all administrations that we see today,” he continued. “It’s easy to set something up in order to trumpet its importance, to signal to a key constituency, but it doesn’t really do much beyond that.”
When Navarro’s position was first announced, the council’s responsibilities were detailed as advising the president on trade negotiations, coordinating with other agencies, and assisting unemployed workers. The council was also designed to lead Trump’s “Buy America, Hire America” program, aimed at boosting jobs in infrastructure and defence sectors.
And just days after Trump’s surprising comments on Chinese currency manipulation, he signed his “Buy American, Hire American” executive order, setting in motion one of Navarro’s largest responsibilities. The adviser quickly made TV appearances to talk up aspects of the order, and the White House pushed out a Navarro statement praising the order.
But with a number of Trump’s promised trade initiatives being slow to get off the ground — leaving some to fear they may not be happening — Navarro’s influence is increasingly under question.
Lori Wallach, head of Public Citizen’s Global Trade Watch, a group generally in favour of the trade reforms proposed by Trump, told Business Insider that Navarro is attempting to help implement the Trump trade agenda with a number of less protectionist members of the Cabinet seemingly in opposition. And as Lighthizer has still not been confirmed — meaning that, additionally, most of the top political positions in the US trade representative’s office are still yet to be filled — she said Navarro has been forced to go at it without much help.
“You’ve got the one person in the saddle who doesn’t have structurally, [the staff,] or experience wise, the chops, to get into a huge Washington policy war,” she said. “As a result, first there is the fight over the ideology, and then the second issue is not having the hands on deck to do the implementation.”
“While a bunch of this initial skirmish was occurring, it was Peter Navarro, who is obviously a very bright and committed guy, but is the one guy who is not cabinet level … so he doesn’t even have the capacity to be in most of those meetings,” she added. “He is someone who is the least sort of political Machiavellian in the sense that he’s never played in this setting.”
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