[CTC] Trump to Create White House Trade Czar Position for Peter Navarro

Thu Dec 22 07:11:04 PST 2016

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https://morningconsult.com/2016/12/21/trump-create-white-house-trade-czar-position-peter-navarro/ <https://morningconsult.com/2016/12/21/trump-create-white-house-trade-czar-position-peter-navarro/> <mailto:eottenfeld at citizen.org> <mailto:eottenfeld at citizen.org>
Trump to Create White House Trade Czar Position for Peter Navarro
RYAN RAINEY <https://morningconsult.com/author/rrainey/>   |   DECEMBER 21, 2016 <http://www.facebook.com/sharer.php?u=https%3A%2F%2Fmorningconsult.com%2F2016%2F12%2F21%2Ftrump-create-white-house-trade-czar-position-peter-navarro%2F>  <http://twitter.com/share?url=https%3A%2F%2Fmorningconsult.com%2F2016%2F12%2F21%2Ftrump-create-white-house-trade-czar-position-peter-navarro%2F&text=Trump%20to%20Create%20White%20House%20Trade%20Czar%20Position%20for%20Peter%20Navarro>  <https://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fmorningconsult.com%2F2016%2F12%2F21%2Ftrump-create-white-house-trade-czar-position-peter-navarro%2F>
President-elect Donald Trump will create a new White House office on trade issues headed by Peter Navarro, a University of California-Irvine professor whose provocative views on U.S. trade and fiscal policy drew attention from the economic community throughout the 2016 campaign, the transition team announced Wednesday.

Navarro will lead the new White House National Trade Council, whose mission is to “advise the president on innovative strategies in trade negotiations, coordinate with other agencies to assess U.S. manufacturing capabilities and the defense industrial base, and help match unemployed American workers with new opportunities in the skilled manufacturing sector,” the transition announcement said.

Based on that description, the NTC will have influence over issues normally managed by the Office of the U.S. Trade Representative, Commerce Department and Labor Department. Navarro’s official title will be Assistant to the President and Director of Trade and Industrial Policy.

USTR negotiates new trade agreements and enforces existing pacts, while the Commerce Department plays a key role in determining if remedial tariffs are necessary to shield injured domestic industries. The Labor Department administers the congressionally authorized Trade Adjustment Assistance program, which provides retraining funds for workers whose jobs were eliminated because of U.S. trade policy.

Navarro, an economist and outspoken critic <https://morningconsult.com/2016/09/19/trump-adviser-bullish-wake-tax-trade-critiques/> of U.S. trade policy and the trading relationship with China, tag-teamed <https://morningconsult.com/2016/10/13/trump-clinton-surrogates-square-off-tax-plans/> in October with Trump’s intended commerce secretary nominee, Wilbur Ross, in articulating Trump’s economic positions. Navarro’s selection for a spot in the next administration, combined with Trump’s statement announcing the NTC’s formation, suggests Trump’s White House will not back away from the skeptical trade rhetoric that was central to his presidential campaign.

Navarro “has presciently documented the harms inflicted by globalism on American workers, and laid out a path forward to restore our middle class,” Trump said in Wednesday’s statement. “He will fulfill an essential role in my administration as a trade adviser.”

The transition team’s description of the NTC’s mission omitted any reference to USTR, and there is precedent for USTR taking a back seat to the White House. Current USTR Michael Froman served as deputy national security adviser for international economic affairs during President Barack Obama’s first term.

After Obama nominated Froman to be USTR in 2013, American Enterprise Institute resident scholar Claude Barfield wrote <http://www.aei.org/publication/obamas-selection-of-michael-froman-as-us-trade-rep-is-an-excellent-choice/> that it was “common knowledge that Froman already ran trade policy from the White House during the first Obama administration.”

Donald Trump’s New Appointments Shake Up Trade, Regulation
Wall Street Journal
By Nick Timiraos, David Benoit and Damian Paletta
December 21, 2016
http://www.wsj.com/articles/trump-names-pete-navarro-to-head-house-national-trade-council-1482353955 <http://www.wsj.com/articles/trump-names-pete-navarro-to-head-house-national-trade-council-1482353955>

Donald Trump selected two key figures for his economic team on Wednesday, both of whom could jolt Washington’s approach to trade and regulation.

The president-elect announced the creation of a new National Trade Council inside the White House to facilitate industrial policy and named an ardent skeptic of trade with China, economist Peter Navarro, to head it.

Later, he tapped billionaire investor Carl Icahn to serve as special adviser on overhauling federal regulations, a job with sweeping implications given Mr. Trump’s campaign promise to remove 90% of federal rules that affect American jobs.

The announcements offer clues about how Mr. Trump will attempt to flesh out his distinct economic agenda that fuses traditional GOP principles of lower taxes and regulation with a more populist approach on trade, immigration and manufacturing.

Agency Has Ruled Trump Will Be in Violation of Washington Hotel Lease, Democrats Say
The corporate world is carefully monitoring the president-elect’s willingness to intervene directly with certain companies, particularly those in the manufacturing sector. Mr. Trump on Wednesday met at his club in Palm Beach, Fla., with the chief executives of Boeing Co. and Lockheed Martin Corp. to discuss in part ways to lower the costs of building a new Air Force One plane for the president-elect and future jet fighters.

One question is whether the new trade and regulatory posts will be vested with real power or whether they are symbolic appointments.

When President Barack Obama took office in the middle of the financial crisis in 2009, he created an “economic recovery advisory” board led by former Federal Reserve Chairman Paul Volcker and Austan Goolsbee, one of Mr. Obama’s longtime economic advisers. The council, whose influence was seen as diminishing, was renamed two years later and had its final meeting in 2012.

Mr. Icahn’s new regulatory post isn’t an official government job, and he won’t draw a salary or have to give up his current business dealings. Yet the role Mr. Trump gave him on Wednesday could broaden his influence in Washington and elsewhere.

“I’m involved with Donald where he wants me to be—I believe he respects my views and I think he listens to me,” Mr. Icahn said in an interview with The Wall Street Journal. “What Trump is trying to achieve is to show business in a lot of this country they aren’t going to be ruined by absurd regulation by bureaucrats.”

Mr. Icahn was an early backer of Mr. Trump and urged him to support efforts to let U.S. corporations bring home offshore cash and to end the carried-interest tax break that benefits many on Wall Street. Mr. Icahn would be one of several billionaires put into important roles by Mr. Trump. The president-elect has rejected criticism of these selections and says he prefers surrounding himself with successful businesspeople with proven track records.

Dean Baker, co-founder of the Center for Economic and Policy Research, a liberal think tank, said Messrs. Navarro and Icahn don’t represent mainstream viewpoints on a number of issues.

“They’re both outliers,” Mr. Baker said. “In the sense that we think of a business establishment, neither of them are in it.”

Mr. Icahn, who has spent the past four decades battling big companies as an activist investor, already has been wielding influence in the president-elect’s transition team. He is playing a central role in selecting the next chairman of the Securities and Exchange Commission, said people familiar with the matter. Interested candidates have reached out to him, and he is interviewing others at the request of Mr. Trump, the people said.

Beyond policy, questions loom over how a handful of mostly newcomers to Washington will develop the relationships needed to work with Congress and the federal bureaucracy while avoiding turf battles that can trip up administrations. 

Wednesday’s appointments illustrate the potential for competing power centers within the administration’s economic policy operation.

“Trump seems to want to run a flat organization with no real hierarchy, which leaves open the possibility of a lot of poles of power and tug-and-pull within the administration,” said Jeb Mason, a Treasury Department official in the George W. Bush administration. “This may leave everyone guessing about who holds ultimate sway.”

Mr. Navarro, a professor at the University of California, Irvine, who served as a top campaign adviser, is the first economist selected by Mr. Trump for a senior White House job.

The National Economic Council, which will be led by Goldman Sachs Chief Operating Officer Gary Cohn, currently handles economic-policy deliberations that cut across multiple agencies, and the National Security Council, to be led by retired Lt. Gen. Michael Flynn, manages international economic policy. Mr. Trump selected another Goldman Sachs veteran, Steven Mnuchin, to be his Treasury secretary.

The U.S. trade representative, a cabinet-level job with the rank of ambassador, has traditionally served as the principal trade envoy for the president. Mr. Trump hasn’t yet appointed someone to that position, and has yet to name the chair of the Council of Economic Advisers, a separate post of academic economists who provide forecasts and other assessments of policy choices.

Senior aides have said Mr. Trump’s selection for Commerce Secretary, Wilbur Ross Jr., will play a central role in the development of trade policy, which could further marginalize the trade representative. Mr. Mnuchin has said he would work closely with Mr. Ross to lead economic policy in the new administration.

Mr. Navarro’s appointment suggests the incoming administration’s trade strategy is continuing to evolve. He “has presciently documented the harms inflicted by globalism on American workers and laid out a path forward to restore our middle class,” Mr. Trump said in a statement.

Several liberal economists said although they oppose many of Mr. Navarro’s policy ideas, he deserves credit for challenging both Democrats and Republicans to think differently about the costs of globalization.

“He contributed to the elevation of this issue of the downsides of globalization, which elite politicians have ignored at great cost for decades, and I give him credit for that,” said Jared Bernstein, a former Obama administration economist.

On trade, Mr. Trump has promised to withdraw the U.S.’s pledge to join the Trans-Pacific Partnership, a trade agreement with Japan and other Pacific Rim nations that Congress has yet to ratify, and he has called for the U.S. to renegotiate the North American Free Trade Agreement with Canada and Mexico.

But it is with China, which isn’t a party to either agreement, where Mr. Navarro has taken his harshest tone.

He has written several books with provocative titles, including “The Coming China Wars” in 2008 and “Death by China: Confronting the Dragon—A Global Call to Action” in 2011, and struck up a correspondence with Mr. Trump several years ago after he saw an interview in which the New York businessman spoke approvingly of Mr. Navarro’s China analysis.

“What we share in common is a deeper understanding of the key structural problem facing the U.S. economy, and it’s the trade issue,” said Mr. Navarro in an interview before last month’s election.

Labor groups have long complained about U.S. trade agreements and are likely to support Mr. Trump’s efforts to adjust policy in ways that bolster domestic manufacturing and curb imports.

“In the past, trade policy has been used as a foreign policy tool by the National Security Council rather than a tool to promote domestic production and job creation,” said Leo Gerard, president of the United Steelworkers union.

Mainstream economists have taken a dim view of recent articles by Messrs. Navarro and Ross that characterize U.S. trade deficits as a drag on growth, which economists say present a flawed and confused view of elementary economic principles.

“Peter Navarro, a friend, is just wrong,” Lawrence Kudlow, the CNBC commentator who advised Mr. Trump earlier this year on taxes, posted on Twitter before the election. Trade deficits, he added, simply reflect capital inflows and not forgone economic gains. Mr. Kudlow is a leading candidate to head the White House Council of Economic Advisers.

Trump Picks ‘Death By China’ Author For Trade Advisory Role
Reuters
December 22, 2016
http://www.huffingtonpost.com/entry/peter-navarro-trump_us_585bcceae4b0d9a594572e50 <http://www.huffingtonpost.com/entry/peter-navarro-trump_us_585bcceae4b0d9a594572e50>

U.S. President-elect Donald Trump named Peter Navarro, an economist who has urged a hard line on trade with China, to head a newly formed White House National Trade Council, the transition team said on Wednesday.

Navarro is an academic and one-time investment adviser who has authored a number of popular books and made a film describing China’s threat to the U.S. economy as well as Beijing’s desire to become the dominant economic and military power in Asia.

Trump’s team praised Navarro in a statement as a “visionary” economist who would “develop trade policies that shrink our trade deficit, expand our growth, and help stop the exodus of jobs from our shores.”

Trump, a Republican, made trade a centerpiece of his presidential campaign and railed against what he said were bad deals the United States had made with other countries. He has threatened to hit Mexico and China with high tariffs once he takes office on Jan. 20.

Navarro, 67, is a professor at University of California, Irvine, and advised Trump during the campaign. His books include “Death by China: How America Lost its Manufacturing Base,” which was made into a documentary film.

As well as describing what he sees as America’s losing economic war with China, Navarro has highlighted concerns over environmental issues related to Chinese imports and the theft of U.S. intellectual property.

China is paying close attention to Trump’s transition team and the possible direction of policy, a spokeswoman for the Ministry of Foreign Affairs said after being asked about Navarro’s appointment.

“Cooperation is the only correct choice. We hope the U.S. works hard with China to maintain the healthy, stable development of ties, including business and trade ties,” the spokeswoman, Hua Chunying, told a daily press briefing.

While Trump in the statement praised the “clarity” of Navarro’s arguments and the “thoroughness of his research,” few other economists have endorsed Navarro’s ideas.

Marcus Noland, an economist at the Peterson Institute for International Economics, likened a tax and trade paper authored by Navarro and Wilbur Ross, who has been named as Trump’s commerce secretary, to “the type of magical thinking best reserved for fictional realities” for what he said was its flawed economic analysis.

‘DON’T POKE THE PANDA’

Navarro has also suggested a stepped-up engagement with Taiwan, including assistance with a submarine development program.

He argued that Washington should stop referring to the “one China” policy, but stopped short of suggesting it should recognize Taipei, saying: “There is no need to unnecessarily poke the Panda.”

China considers Taiwan a renegade province and has never renounced the use of force to bring it under its control.

China’s foreign minister, Wang Yi, said in an interview carried on Thursday in the Communist Party of China’s official newspaper that China-U.S. relations face new uncertainties but with mutual respect for core interests they will remain stable.

“Only if China and the United States respect each other and give consideration to other’s core interests and key concerns can there be long-term, stable cooperation, and effect win-win mutual benefit,” Wang said.

After his Nov. 8 election win, Trump stoked China’s ire when he took a telephone call from Taiwan President Tsai Ing-wen in a break with decades of precedent that cast doubt on his incoming administration’s commitment to Beijing’s “one China” policy.

In an opinion piece in Foreign Policy magazine in November, Navarro and another Trump adviser, Alexander Gray, reiterated the president-elect’s opposition to major trade deals, including the Trans-Pacific Partnership (TPP).

“Trump will never again sacrifice the U.S. economy on the altar of foreign policy by entering into bad trade deals like the North American Free Trade Agreement, allowing China into the World Trade Organization, and passing the proposed TPP,” Navarro and Gray wrote.

“These deals only weaken our manufacturing base and ability to defend ourselves and our allies.”

Trump has vowed to pull the United States out of the TPP, a free-trade pact aimed at linking a dozen Pacific Rim nations that President Barack Obama signed in February. It has not been ratified by the U.S. Senate.

The president-elect has also vowed to renegotiate the NAFTA pact with Canada and Mexico, saying it had cost American jobs.
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