WASHINGTON: Reducing Amer\u00aci\u00acca\u2019s huge trade deficits would deliver stronger economic growth and improve national security, the White House trade adviser said in a speech that underscored the Trump administration\u2019s harsh view of recent US trade policies.
\nSpeaking at a National Association of Business Economics conference, Peter Navarro argued that China and other trading partners use the proceeds from export sales to buy US companies and technology, reducing America\u2019s self-reliance. He says, for example, that only one US company is capable of repairing the propellers on Navy submarines.
\n\u201cMight we lose a broader cold war for America\u2019s freedom and prosperity, not by shots fired but by cash registers ringing?\u201d Navarro said. \u201cMight we lose a broader hot war, simply because we have sent our manufacturing and defence industrial base off-shore.\u201d
\nPresident Donald Trump named Navarro, a University of California-Irvine economist, to lead a new White House council on trade. The appointment signalled Trump\u2019s intention to shake up relations with China. Navarro is a sharp critic of Chinese economic and military policies.
\nNavarro\u2019s views on the trade deficit stand in stark contrast with mainstream economists, a difference he seemed to relish in his remarks. Most economists see trade deficits as an outcome of a nation spending more than it saves, rather than the result of bad trade deals.
\nThey worry that the measures pushed by Navarro, such as higher tariffs, would raise prices for imports of consumer goods such as clothes, toys and electronics. They also warn that it could spark retaliatory measures that would harm US exports.
\nNavarro on Monday said mainstream economists underestimated the damage caused by massive trade deficits. Last year, the United States exported $1.45 trillion in goods and imported $2.19 trillion, creating a trade deficit of more than $734bn in goods, almost half of it with China.
\nHe said the Trump administration would reduce trade deficits by negotiating better trade agreements and reducing corporate tax rates and regulations to make American companies more competitive.
\nNavarro waved away the argument that cracking down on imported goods would raise prices for American consumers. He says \u201cmodest inflation\u201d would be a worthwhile price to pay for saving and creating US jobs.
\n\u201cThis seems to be an elitist out-of-touch argument, as it assumes that the poorest segments of our society would rather have cheap products than a good job, and a good pay cheque,\u201d he said.
\nNavarro described his job as leading a \u201cSWAT team\u201d in the White House that helps US companies contend with unfair trade practices abroad and burdensome regulations at home.
\nHis remarks also sketched out the full ambition of Trump\u2019s trade policies. For example, Navarro said the administration wants to encourage more companies to make or source their parts in the United States, rather than simply assembling foreign made parts in the US
\n\u201cOne of the major goals of the Trump administration is to reclaim all of the supply chain and manufacturing capabilities that would otherwise exist if the playing field were level,\u201d Navarro said.
\nYet this could be a tall order: many large US corporations source parts from dozens of countries around the world, a result of decisions made over decades. Boeing, for example, uses parts from 90 countries.
\nGlenn Hubbard, who served as George W. Bush\u2019s top economic adviser, said during a press briefing at the conference that forcing the relocation of supply chains \u201cwould be very disruptive.\u201d \u201cI don\u2019t think business people are comfortable with that,\u201d Hubbard added.
\nDoug Elmendorf, former director of the Congressional Budget Office and a former Clinton administration official, said that Trump\u2019s proposed tax cuts and deregulatory agenda could accelerate the economy\u2019s growth. But the administration\u2019s trade policies could offset those benefits.
\n\u201cTheir approach to trade policy is one thing that will lower growth,\u201d Elmendorf said.<\/p>\n","protected":false},"excerpt":{"rendered":"
WASHINGTON: Reducing Amer\u00aci\u00acca\u2019s huge trade deficits would deliver stronger economic growth and improve national security, the White House trade adviser said in a speech that underscored the Trump administration\u2019s harsh view of recent US trade policies. Speaking at a National Association of Business Economics conference, Peter Navarro argued that China and other trading partners use […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-14218","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n