Trade Wars

“China steals our intellectual property, they invade our export controls, and then once they basically cheat us, they use all that money to acquire our technology, our crown jewels.” – Peter Navarro

In a recent interview, Peter Navarro blamed China’s cheating as the reason Trump declared a full-scale trade war. China will pay tariffs on an additional $200 billion worth of goods per year. When asked what triggered this move, Navarro said, “Oh, there’s no sudden aspect to this.”

If you have a copy of Crouching Tiger: What China’s Militarism Means for the World, or Death by China: Confronting the Dragon – A Global Call to Action, by Peter Navarro, you understand his worldview. The storyline is always the same. China is a world threat and the US needs more weapons. Reading fiction is fun, but Navarro is Trump’s trusted trade adviser, a recipe for war.

Gary Cohn, the former Goldman Sachs president and a free-trade advocate, was Trump’s Chief Economic Advisor when Navarro came to the White House. The book FEAR reveals a meeting between Trump, Cohn and Navarro on international trade. Cohn explained U.S. trade deficits are irrelevant and could be a good thing. Navarro said U.S. trade deficits were driven by China’s currency manipulation, intellectual property theft, sweatshop labor, and lax environmental controls. Navarro said NAFTA had driven Mexico into a manufacturing powerhouse sending US workers to the poorhouse.

Navarro said Trump should impose tariffs on imported steel. Trump agreed. Cohn tried his best to convince Trump of the benefits of free trade. At one point, Cohn asked Trump, why do you have these views? “I just do, I’ve had these views for thirty years,” Trump said. Cohn resigned after Trump imposed tariffs on steel and aluminum.

Who pays for the import tariffs?

We do. If you are planning to buy an iPhone or any of the countless consumer products made in China be ready to pay more. Walmart says prices would go up by 10 to 25 percent if the tariffs kick in.

Why would Trump betray America?

1. 1. Diversion. Trump’s legal problems are getting worse every day. Trump may fire Rod Rosenstein, Deputy Attorney General, creating additional chaos.
2. 2. Ignorance. The U.S. budget deficit is expected to be $1 trillion for fiscal year 2018. This is very bad. Increased military expenses and corruption at the highest levels are hard to stop. Trump’s culture of waste and excess is the only thing that trickles down. In 2017, the U.S. trade deficit with China was $376 billion. This is good. U.S. consumers had the opportunity to buy great products at low prices, thereby saving money to buy U.S. products, creating U.S. jobs. China will retaliate imposing tariffs on U.S. products. This is very bad.
3. 3. Chaos and fear. A “301 investigation” loophole was used to give Trump power to punish China. This is not normal. The U.S. Congress has the sole power to set trade tariffs. The Secretary of Commerce, the Secretary of Treasury, the U.S. Chamber of Commerce, and other trade experts make recommendations. The Office of the U.S. Trade Representative is responsible for product selection. But Robert Lighthizer, the U.S. Trade Representative, worries about China’s world domination. Trump, Lighthizer, and Navarro are known as the Iron Triangle.
4. 4. Greed. Tariffs paid to import goods from China are collected at the port of entry and transferred to the U.S. Treasury where they mingle with your taxes. U.S. companies or individuals owning patents and other intellectual property, whose rights have been violated by Chinese cheaters, get zilch, nada, zero. Tariffs hurt U.S. companies and jobs. Arkansas farmers lost the soybean market.

No more wars

To respond to the Climate Crisis we need peace, compassion, action, and responsible leadership. Noam Chomsky at a May 20, 2018, lecture asked, “Whether organized human life will indeed survive in your generation.” He reminded us the U.S. has been a world threat since 1945 when it obliterated Hiroshima. Chomsky asks us to reflect on U.S. historical behavior and act. Small groups of unwavering individuals have the power to change the world.

Dr. Luis Contreras