White House Adviser Navarro Urges Wall Street to Back Off on China Talks

Assistant to the President and Director of the White House Office of Trade and Manufacturing Policy Peter Navarro speaks at the Center for the Strategic and International Studies (CSIS) in Washington on Nov. 9, 2018. (Courtesy of CSIS)

WASHINGTON—White House trade adviser Peter Navarro lashed out at Wall Street executives and globalists, calling them “unregistered foreign agents” who are pressuring President Donald Trump into ending the trade dispute with China.

“The president of the United States does not need shuttle diplomacy,” Navarro said on Nov. 9 in a speech at the Center for Strategic and International Studies, a Washington think tank.

“When these unpaid foreign agents engage in this kind of diplomacy, so-called diplomacy, all they do is weaken this president and his negotiating position.”

Navarro called a group of U.S. bankers and hedge-fund managers “foreign agents” who serve a “Chinese government-influenced operation.” He accused them of “putting a full-court press” on the White House ahead of the Group of 20 (G20) summit.

Trump is planning to meet Chinese leader Xi Jinping at the G-20 in Buenos Aires later this month. Both sides are considering a formal, bilateral sit-down meeting.

The mission of the Wall Street players is to pressure the president into some kind of deal, Navarro said.

“If there is a deal—if and when there is a deal–it will be on President Donald J. Trump’s terms not Wall Street’s terms,” he said, urging them to get out of the negotiations.

Navarro mentioned Goldman Sachs in his speech several times. In September, the Chinese Communist Party officials invited some of Wall Street’s top executives to Beijing to seek advice on how to ease trade tensions with Washington.

The Financial Times reported that the invited executives included John Waldron, president and CEO of Goldman Sachs, along with the heads of Citigroup, JPMorgan Chase, Morgan Stanley, and Blackstone Group, and former U.S. Treasury Secretary Hank Paulson.

Navarro called on Wall Street to “spend their billions in Dayton, Ohio in the factory towns of America,” instead of engaging in a “shuttle diplomacy.”

“If Wall Street is involved and continues to insinuate itself into these negotiations, there will be a stench around any deal that’s consummated because it will have the imprimatur of Goldman Sachs and Wall Street.”

Economic Security Is National Security

Trump introduced the maxim that “economic security is national security,” said Navarro, who added that this maxim has been the guiding principle for many of the president’s policies, including tax reform, deregulation, and unleashing the energy sector.

Using a Section 301 investigation to tackle China’s unfair trade practices is also part of Trump’s broader strategy to improve both economic and national security.

Navarro praised U.S. Trade Representative Robert Lighthizer and his role in recommending using Section 301, “a power that was laying dormant for four decades.”

“We have, in my judgment, the finest United States Trade Representative we’ve had in our history,” he said. “We are able to now protect our technologies and intellectual property from Chinese predation, and it’s been tremendously successful.”

Based on the investigation findings, USTR developed recommendations to confront China over its state-led, market-distorting policies and practices, forced technology transfers, intellectual property theft, and cyber theft.

As part of the measures to improve U.S. economic and national security, Trump also ordered an assessment of America’s manufacturing and military industrial base. After a yearlong effort, the Department of Defense released a report last month, finding roughly 300 gaps and vulnerabilities across the defense supply chain.

The weak spots include reliance on a single source of critical equipment or material, dependence on foreign manufacturers, and looming labor shortages.

According to Navarro, the most important information uncovered in the report was the high degree of foreign source dependency, which is a product of the globalization of the defense industry supply chain.

“These vulnerabilities are not random,” Navarro said. “In some cases, they are the direct effect of strategic rivals, principally China, targeting somewhere in our supply chain or some sector and basically making that vulnerability either existing or worse.”

Cuts to the defense budget, the decline of the manufacturing base due to the forces of globalization, and unfair trade practices by economic competitors have enabled these vulnerabilities to grow.

According to the report, “China represents a significant and growing risk to the supply of materials deemed strategic and critical to U.S. national security,” including a “growing number of both widely used and specialized metals, alloys and other materials, including rare earths and permanent magnets.”

The report also talks about China’s strategies of economic aggression, such as protecting its own market from competition, dominating traditional manufacturing industries, and acquiring technology and intellectual property from the rest of the world.

According to Navarro, the Chinese regime uses 50 tools to pursue these strategies of aggression, including high tariffs, high non-tariff barriers, imposing indigenous standards for products, currency manipulation, cyber theft, espionage, forced technology transfer, and massive subsidies.

“[If] you understand what China is doing to us in the world, you will also understand why it’s so difficult to undo what they are doing to us,” Navarro said.

The Trump administration presented Chinese officials with a long list of trade demands during the talks this year. The White House, however, doubts the ability of Beijing to meet these demands.

“How do you have a deal with somebody if they don’t even acknowledge your concern? It’s Alice in Wonderland,” Navarro said.