One of the big promises that Trump made in 2016 was that he would rebalance our trade deals with nations including China. He’s taken a big step in that direction.
Peter Navarro, Assistant to the President, and Director of Trade and Manufacturing Policy joined Hugh Hewitt to explain just what made this new trade deal so different from the status quo as we had it before.
We gain some insights not only into the President’s philosophy relating to trade and national security, we find out what steps have been made to secure the interests of Americans, and (crucially) what enforcement mechanisms have been put in place.
Note: anything in bold is not in the original text.
We join the interview already in progress…
HH: …while I hate the tariffs on our allies like France, that’s for another day, I want to talk about this China deal, because tariffs in the context of China are national security policy, not economic policy. Do you agree with me on that, Peter Navarro, that this is not about economics, it’s about national security?
PN: So the more subtle framing of that, which is kind of a foundation of the whole Trump administration, is that economic security is national security. So the two are ineluctably intertwined. And too many times in the past, our leaders have been willing to sacrifice our economy to gain national security benefits. What this president understands is if we cede the technology high ground to China by allowing them to attack us economically, we will not only be weaker economically, but also be weaker from the national security point of view. So I think we’re on the same page on that, but I see the two as one and the same, and perhaps that’s where our disagreement might lie.
HH: Well, our disagreement is primarily geographical. I don’t want to have tariffs on France, but I want you to continue to hammer the Chinese, and that’s where I want to turn to the agreement today. I’ve read the New York Times story about it. I haven’t read the agreement, yet. Michael Pillsbury was on last hour, one of my great experts on China. I quote him. “The Chinese are addicted to technology theft.” I agree with that. I know you agree with that. How does this agreement break that addiction?
PN: Let’s distinguish between intellectual property theft and force technology transfer, which are the two big things in this phase one deal. The force technology transfer, Hugh, is a particularly virulent kind of form of economic aggression. China’s always promised this 1.3 billion consumer market, lured our companies over there, but in exchange for that market access, they’ve had to surrender their technology. Totally against the rules of the WTO. We were never able to enforce that rule. In this agreement, we will be able to enforce the rule, and that critically, the most important part of phase one is the enforcement mechanism. It’s a 90 day clock. If we’ve got, if a company’s got a problem, they come to Lighthizer, who’s the United States Trade Representative. It gets adjudicated in 90 days. And if we don’t like the result, then we get to take measures to deal with that, and China can’t retaliate. That’s what they’re signing today. So that’s…
HH: By the way, that’s huge. If it works, it’s huge, and it will be one of the great feathers in the President’s cap.
PN: It’s huge. It’s huge.
HH: But that’s 90 days down. Let me pause for a moment, and by the way, Lighthizer’s from Ashtabula, Ohio. That’s why he’s effective, Peter.
PN: I love the guy. He is the best trade representative we ever had. But I don’t want his head to get swollen, because we’ve only had a trade representative since 1960. So it’s not…
HH: He’s from Ashtabula. He’s just tough. Just understand the winters in Ashtabula make you tough. Now let me talk to you about the fact that American companies, though, are still subject to what Michael Pillsbury called mafia-like tactics. Were you disappointed that the NBA caved when China threatened them over the comments of the Houston Rockets general manager?
PN: I was gloriously amused watching people like LeBron James and Steve Kerr and all these people who are just so pious critics of our president, and they folded like a cheap tent. I mean, it was like you’ve got to be kidding. And you know, the only one who really spoke up, I thought beautifully, was Shaquille O’Neal, who I always loved when he was back in L.A. Yeah, I mean that was a disgrace, Hugh. That was an absolute disgrace the way those people behaved.
[…some light banter about the ‘woke’ NBA’s servile capitulation to China’s authoritarianism followed by a reference to the President listening to Hugh Hewitt’s show. …]
HH: Oh, good. I’m glad he is listening. Tell him he can come on anytime. And I know that he keeps saying he’s going to, but we haven’t seen him, yet. Peter, the reason I bring up the NBA is because of what Pillsbury said. They are the most easily understood example of the mafia-like threat that the PRC exercises over every American company doing business in China. And it was brought up specifically by the, Michael Pillsbury that GM suffers under the same threat that does the NBA. What are we going to do about that? If they can crush companies, if they can force the NBA and LeBron James to their knees, they can do it to a small company in America, can’t they?
PN: So that’s what the enforcement mechanism is all about. That’s the ultimate protection here, Hugh. But let me talk a little bit about what Lighthizer has said in this, because it’s really interesting. I mean, he says this deal hinges basically on what happens in China. And he distinguishes between a group of reformers in China who legitimately know that their economic model is a disaster and needs to change. That’s represented by Liu He, the vice premier, who will be in town today signing that deal. But there’s also the hawks, the mercantilist, basically Chinese Communist Party protectionist, mercantilist, who think that the only way to rise up while the Chinese economy is on the backs of everybody else. And so there’s going to be a struggle there. And the good news here, Hugh, is that if the mercantilists in China win, we’ve got our tariffs, and we’ve got our tough stance. If the reformers win, then we’ve got a deal that works for the whole world. So this is the best you can do. The President has changed the whole discussion about China. I mean, I don’t know how long you’ve talked about China in the light, in the clear light of day what they do to this country. But it’s been an epiphany for a lot of folks in this country. And in the last three years, the attitudes on China has completely changed.
HH: Oh, no, it is the great achievement in foreign policy to have brought clarity to the relationship between the PRC and the U.S….
PN: It is
End Transcript. — Source: HughHewitt
So to conclude, Trump sees economic and national security as intrinsically intertwined and sees the defense or failure to defend one as the failure to defend both.
Does anyone REALLY think Hillary would have even ATTEMPTED to get this done, let alone have pushed hard to pull some real concessions out of officials in China?
While the Democrats are busy trying to figure out how to fleece Americans for everything they own, Trump is giving American companies a fighting chance in the markets, where R&D and innovations will NOT be stolen by rivals in China, killing jobs here in the process.