Watch CNBC's full interview with White House senior trade adviser Peter Navarro

Summary

In this interview, Peter Navarro, Senior Trade and Manufacturing Adviser to President Trump, discusses the U.S. trade policy, focusing on tariffs and the global trade landscape. He emphasizes the importance of addressing non-tariff barriers, currency manipulation, and unfair trade practices by other nations, particularly Vietnam and the European Union. Navarro argues that the U.S. aims to rejuvenate domestic manufacturing, reduce the trade deficit, and ensure fairer trade practices. He also responds to criticisms from figures like Elon Musk and clarifies the administration's long-term economic strategy, despite the current market volatility.

Takeaways

• 😀 President Trump's trade advisor, Peter Navarro, discusses the ongoing trade negotiations and tariffs, emphasizing the importance of non-tariff barriers in international trade.
• 😀 Navarro predicts that the Dow Jones will hit 50,000, leading to a broad-based recovery in the S&P 500, with a focus on avoiding panic among retail investors.
• 😀 He emphasizes the significance of the upcoming tax cuts, calling them the biggest tax cut in American history, which will contribute to the economy's growth.
• 😀 Navarro argues that the global recession concerns are largely related to the restructuring of economies in countries like China, Vietnam, and Germany, which will require significant fiscal stimulus.
• 😀 He defends the administration's methodology in handling tariffs and dismisses criticism from think tanks like the American Enterprise Institute.
• 😀 The primary challenge in trade negotiations, according to Navarro, is not just zero tariffs but addressing non-tariff cheating like currency manipulation and export subsidies.
• 😀 Navarro stresses that tariffs are seen as a tool to generate revenue and help fund tax cuts and reduce the U.S. trade deficit.
• 😀 He emphasizes that President Trump’s ultimate goal is to bring manufacturing back to the U.S., which he believes will boost national security and economic stability.
• 😀 The discussion around tariffs also includes the idea that these tariffs can help make American industries more competitive and bring jobs back to the U.S. despite potential short-term pain.
• 😀 Navarro responds to criticism from Elon Musk, highlighting the difference in views on manufacturing, with Musk favoring cheaper foreign parts while Navarro advocates for producing goods domestically.
• 😀 He predicts that the trade market will eventually find its bottom, but any negotiations should focus on countries addressing non-tariff barriers rather than simply reducing tariffs.
• 😀 The EU’s readiness to negotiate tariffs with the U.S. is discussed, with Navarro stressing the need for the EU to lower non-tariff barriers, such as VAT taxes, and respect WTO rulings on U.S. agricultural exports.

Q & A

What is the primary focus of Peter Navarro's discussion in this interview?

Peter Navarro discusses the current trade policies under President Trump, focusing on tariffs, trade deficits, and global economic strategies aimed at boosting American manufacturing and reducing foreign trade imbalances.

What is the significance of tariffs in President Trump's trade policy, according to Peter Navarro?

Navarro emphasizes that tariffs are part of a broader strategy to address chronic trade deficits and to incentivize foreign companies to produce goods in the U.S. rather than relying on imports. Tariffs also help raise revenue that can be used for tax cuts and debt reduction.

Why does Peter Navarro argue that Vietnam's offer to reduce tariffs to zero is not enough?

Navarro explains that Vietnam's offer is insufficient because the real issue lies in non-tariff barriers, such as currency manipulation, unfair subsidies, and intellectual property theft, rather than just tariff rates. He believes that Vietnam's trade practices, including transshipment of goods through China, are problematic.

How does Peter Navarro respond to the suggestion that tariffs might harm American consumers and industries?

Navarro argues that while some industries, such as agriculture, might face short-term challenges, the broader goal of bringing manufacturing back to the U.S. will ultimately benefit the economy. He stresses that tariffs are meant to create a long-term competitive environment for American manufacturing.

What is the larger economic strategy behind President Trump's tariff policies as described by Navarro?

Navarro outlines a strategy where tariffs serve as a tool to bring U.S. manufacturing back home, reduce reliance on foreign imports, and address the $1.2 trillion trade deficit. The goal is to foster economic security by ensuring that more goods are produced domestically, benefiting American workers and industries.

How does Navarro view the relationship between Wall Street and Main Street in the context of the current trade policies?

Navarro acknowledges that while markets are volatile and the S&P could be in bear market territory, the focus should remain on the long-term impact of policies aimed at revitalizing American manufacturing. He believes that the broader recovery, especially in the S&P 500, will eventually stabilize and grow.

What role does the World Trade Organization (WTO) play in Navarro's trade argument?

Navarro mentions that the U.S. has fought cases at the WTO to protect American agricultural products like pork, beef, and corn. However, he criticizes the WTO for not supporting U.S. requests for relief from VAT taxes imposed by other countries, such as the EU, which he views as an unfair trade practice.

Why does Peter Navarro reject the idea of simply negotiating tariff reductions with other countries?

Navarro rejects this approach because he believes that tariff reductions alone would not address the core issues of non-tariff cheating. He insists that countries must also eliminate practices like currency manipulation, export subsidies, and intellectual property theft to create fairer trade conditions.

How does Peter Navarro respond to the concerns about the time it takes to bring manufacturing back to the U.S.?

Navarro acknowledges that it will take time to rebuild U.S. manufacturing infrastructure, but he points to successful efforts during the COVID-19 pandemic, where industries like GM quickly repurposed factories to produce ventilators. He is confident that the U.S. can accelerate manufacturing recovery despite the challenges.

What is Peter Navarro's stance on the EU's offer to negotiate tariffs with the U.S.?

Navarro expresses caution, urging the EU to focus not just on reducing tariffs, but also on addressing non-tariff barriers like VAT taxes and unfair subsidies. He is wary of the EU's offer unless it includes a comprehensive plan to resolve these deeper trade issues.