[CTC] White House aides torn over trade hawk’s proposal as President Trump weighs action on China

Wed Apr 29 08:16:31 PDT 2020

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White House aides torn over trade hawk’s proposal as President Trump weighs action on China
By Jeff Stein, Robert Costa and Josh Dawsy
04/29/2020

A debate over an executive order to boost American production of medical supplies has gripped the White House, as President Trump weighs how to confront China over the coronavirus <https://www.washingtonpost.com/health/2020/02/28/what-you-need-know-about-coronavirus/?tid=lk_inline_manual_2&itid=lk_inline_manual_2> outbreak without exacerbating the economic crisis sparked by the pandemic.
Trump has groused about China during several recent Oval Office meetings and expressed interest in an executive order crafted by White House trade adviser Peter Navarro, the president’s leading China hawk and a divisive figure within the administration. The executive order would over time require the federal government to buy medical supplies and pharmaceuticals manufactured in the United States, aiming to reduce dependency on imports and increase domestic production.
But Trump has stopped short of signing the measure. Several of Trump’s confidants, including Treasury Secretary Steven Mnuchin, have voiced reservations about embracing’s Navarro strategy, according to three officials familiar with the deliberations.
The unresolved debate underscores the tensions inside the West Wing as Trump publicly expresses the desire to exact compensation from China over the coronavirus, but is warned privately against jeopardizing the chances of a U.S. economic recovery or access to medical supplies from abroad, all as he turns toward his reelection campaign.
Navarro’s draft, which has circulated among senior officials for several weeks, would require the federal government to only purchase essential medical equipment and pharmaceuticals manufactured in America. Navarro has argued it would make the United States less dependent on foreign nations for critical medical supplies. The order gives firms substantial time to figure out the new requirements, reducing the shock it could have on prices and production, two former officials familiar with its contents said.
Although it has the support of some officials at the State Department and the National Security Council, Mnuchin and several business leaders close to Trump are averse to making a major push on supply chains at a fragile moment for the economy, they said. And Trump’s son-in-law and senior adviser, Jared Kushner, shares Mnuchin’s caution about Navarro’s push to do this executive order at this time, two officials said, and has been focused on responding to the pandemic.
Some White House aides privately insist the order could still be approved, but others say it could be stuck in the Office of Legal Counsel under review for weeks to come since it lacks sufficient support within Trump’s inner circle. Still, the lag on Trump’s signature has frustrated some of Navarro’s allies inside and outside the administration.
Officials interviewed for this story spoke on the condition of anonymity to speak frankly about sensitive internal deliberations.
The internal struggle over Navarro’s proposal highlights a long-standing White House rift over China that has gained new dimension and significance as the president considers his response to Beijing’s handling of the coronavirus.
For decades, Trump has assailed his predecessors for being weak in confronting Beijing, arguing the Chinese have for decades exploited clueless American politicians to ravage the U.S. economy. In White House coronavirus news conferences, he has repeatedly returned to the trade deal with China reached by his administration last year.
“In the history of any country, nobody has been ripped off like the United States by China — and many other countries. And we stop it,” Trump said at a White House press briefing last week. “Nobody has been tougher before the deal ever, on China, than Trump.”
But confronted with a deadly global pandemic that originated in China and devastated the U.S. economy, Trump has appeared at times ambivalent in his response. The president initially praised Chinese Premier Xi Jinping’s handling of the outbreak, saying Xi is doing “a very good job with a very, very tough situation.” When the virus spread to the United States, Trump resisted major swipes at Xi and instead targeted his fury at the World Health Organization. Senior aides say this a way for Trump to vent and reassure his base that he is battling an organization with ties to China, even if he’s not battling China and Xi daily.
Trump has sometimes stuck to a “wait-and-see” approach, suggesting China may not bear responsibility for the outbreak and ensuing damage.
“If it was a mistake, a mistake is a mistake,” Trump said last week of China and the coronavirus. “But if they were knowingly responsible, yeah, I mean, then sure there should be consequences.”
At other times, Trump has struck a more aggressive tone. On Monday, the president strongly suggested the United States would seek hundreds of billions of dollars in damages from China because of the virus.
“We haven’t determined the final amount yet. It’s very substantial,” Trump said. “This is worldwide damage.”
Inside the administration, some officials are wary of an aggressive confrontation with Beijing. In private discussions, Mnuchin, Kushner and their allies have warned that Trump could jeopardize critical protective gear for American medical workers if the White House ramps up its attacks on Xi or accedes to Navarro’s demands for remaking the U.S. supply chain. They have also urged Trump to wait to act until further investigations of China’s role are concluded, officials said.
“Nobody except Peter wants to slam China over and over again, because we’re going to need what China is making, whether it’s equipment or a vaccine down the road, you never know,” one White House official said.
Navarro, 70, has for decades blamed China for many of America’s most serious social and economic problems and feels vindicated by the outbreak, according to three people he has spoken to in recent weeks. Navarro warned in private memos in January about the danger posed by the coronavirus, and circulated to White House advisers an “official coronavirus response plan,” which included PowerPoint slides and other written materials about the potential impact of the virus, one person familiar with the documents said.
Navarro has accused China of creating the virus and using the deadly outbreak to “profiteer” off the world’s pain. Chinese officials have adamantly denied this. Regardless, Navarro has asserted Beijing created the virus in a government laboratory, then “knowingly hid” proof of its spread. He, and others pushing this theory, have not produced any evidence to back up their claim. Alleging China committed “four kills” in its handling of the virus, Navarro has said the Chinese bought the world’s supply of personal protective gear, then deliberately sold those goods back to the world at inflated prices.
“The Chinese effectively declared war. They spawned that virus,” Navarro said on Fox News on Saturday.
In an interview, Navarro said the proposed executive order was not aimed at China or any other specific country but instead intended to secure the United States’ ability to produce critical medicines, supplies, and equipment. Navarro said he and other administration officials are focused on the current crisis of rapidly mobilizing and repurposing industrial capacity to meet U.S. demand.
More than 75 other nations have imposed export restrictions on crucial medical supplies, which Navarro said demonstrates “how countries realistically act in their own self-interest to the exclusion of others when globalist push comes to nationalist shove.”
“This is a defensive measure for the American people not aimed at any other country,” Navarro said. “Onshoring America’s public health industrial base is both a national imperative and the logical conclusion to draw from a pandemic that has exposed the weak underbelly of globalized supply chains and the risks of not domestically producing your essential medicines and medical countermeasures.”
Navarro has in recent days circulated Pew polling data showing a sharp turn in public sentiment against China. Bipartisan proposals have emerged in the Senate to require onshoring of U.S. pharmaceutical supplies. Sen. Josh Hawley (R-Mo.) has introduced legislation requiring firms to return production to the United States, while numerous Republican senators, including White House ally Sen. Lindsey O. Graham (R-S.C.), have argued that China “needs to pay” for the pandemic and face sanctions for its role in the virus.
Leading Democrats such as Senate Minority Leader Charles E. Schumer (N.Y.) have also called for Trump to act more aggressively toward China. Former vice president Joe Biden, the presumptive Democratic presidential nominee, recently released an ad attacking Trump for not being sufficiently tough on China.
“Everybody I talk to in the Senate is thinking about how Communist China has treated America as an adversary. Even the globalists, even those who say we need a free economy — they look at it now and say, ‘The coronavirus is the tipping point that pushed it over the edge,’” Sen. Rick Scott (R-Fla.) said. “Peter has been clear in his belief that China is an adversary and not to be trusted, and the coronavirus has shown he’s been right.”
Navarro may prove too personally polarizing within the White House to push Trump toward confrontation. Navarro’s memos on coronavirus, for example, were disregarded by other administration officials. Administration communications officials worry about Navarro on TV and have sought in the past to keep him off the air. “Peter sends a lot of memos,” one official said.
Navarro has repeatedly clashed with top administration officials, recently questioning the medical judgment  <https://www.politico.com/news/2020/04/06/navarro-fauci-feud-coronavirus-treatment-167855>of Anthony S. Fauci, the nation’s leading infectious-disease expert. 
Former White House economic adviser Gary Cohn tried sidelining Navarro by assigning him to an office that “amounted to a broom closet,” one former senior administration official said. 
Some international trade experts warn Navarro’s demands could have devastating consequences for Americans on the front-lines of responding to the pandemic, arguing that foreign countries could devastate U.S. access to supplies through retaliation. Earlier this month, the Trump administration faced an international backlash when it tried to impose additional controls on exports of American-made PPE. Canada, for instance, manufactures a specialized tree pulp the United States imports for production of its masks. The administration later added significant exemptions to its proposed restrictions.
“You’re exposing yourself to retaliation,” said Chad Bown, a trade expert at the Peterson Institute for International Economics, who is critical of Navarro. “You’re making yourself vulnerable to being cut off from supplies from other countries. It’s a huge benefit to have access to international markets to have a diverse source in a time of need.”
But others say the United States must try to force production back to domestic soil. “The notion that an angry Chinese government would limit medicine and PPE imports on which we are incredibly reliant in retaliation for the U.S. enacting policies to incentivize more domestic manufacturing of such supplies precisely spotlights why it’s critical to expand domestic capacity,” said Lori Wallach, a trade expert at Public Citizen, a left-leaning organization.
Bob Bland, founder of Masks for America, which has secured hundreds of thousands of masks for nurses across the country, said the United States’ dependence on China for personal protective gear has dramatically undercut its ability to protect its front-line medical personnel.
“Countries all over the world are realizing we don’t have the ability to make any of this locally, but local production is the only way to scale up quickly enough and avoid price gouging,” Bland said. “The answer to that has to be regional production for PPE. It would give us a fighting chance against pandemics like this in the future.”
Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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