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‘It’s a trillion-dollar coin toss.’

DOUGLAS HOLTZ-EAKINa conservative economist and former director

of the Congressional Budget Ofice on the risks of Trump’s tariffs

Economists may disdain Navarro but

plenty of Americans agree with him as

the 2016 election showed. Both Trump on

the right and Bernie Sanders on the left

tapped into populist opposition to for-

eign trade deals. In one 2016 poll 68%

of Americans said they’d rather have an

American factory that created 1000 jobs

than a Chinese-owned factory that cre-

ated 2000 jobs in their community.

Navarro joined Trump’s campaign

as an economic adviser in 2016. But in

the White House Trump was initially

surrounded by free traders who sought

to dissuade him from imposing tarifs

and pulling out of global agreements

such as NAFTA. Republicans in Congress

pushed Trump to focus his energies on

tax cuts rather than duty hikes. The

internal debate was contentious with

screaming matches in the Oval Oice

and bureaucratic ights behind Trump’s

back. For the irst year the “globalists”

seemed to prevail marginalizing Navarro

who was reportedly excluded from many

top-level strategy meetings and required

to copy chief economic adviser Gary Cohn

on all his emails.

Two key departures in early 2018

changed the equation. Staf secretary

Rob Porter a strong advocate of free trade

resigned in February amid accusations of

domestic violence. Cohn followed him out

the door in March after Trump insisted

on moving forward with tarifs on steel

and aluminum. “For a long time Navarro

was put in a closet where he couldn’t do

any harm” says Tony Fratto a former

Treasury Department oicial under

George W. Bush. “But when Gary stepped

down it left a huge hole for him to run

through and he was pushing on an open

door because Trump has believed these

things for years.”

Out of Trump’s earshot Navarro is as

abrasive as ever berating and demeaning

those he disagrees with and working

aggressively to block contrary views

from reaching the President according

to three sources in and outside the

Administration. As for how the onetime

environmentalist who deplored greedy

corporations feels about working in

a White House that has rolled back

environmental regulations and enacted

a massive corporate tax cut it’s not clear.

Navarro declined to be interviewed for

this article. His most recent writings give

few hints to his current views. Some of his

past concerns are still evident: inDeath by

China Navarro blasts greedy corporations

for putting their proits ahead of jobs for

American workers and he criticizes China

for polluting the environment. Navarro’s

allies argue that traditional economic

analyses fail to account for the destruction

free trade can wreak on people’s lives.

“We lost the trade war decades ago” he

told Axios in June “once we entered into

NAFTA and let China into the WTO.”

THE RESULTSof Navarro’sinluence on

trade are evident. China Canada and

members of the E.U. have imposed retal-

iatory tarifs on hundreds of billions of

dollars’ worth of American goods lead-

ing to warehouses full of excess meat and

a giant surplus of dairy products. The

price of soybeans has plummeted while

the prices of some washing machines are

up by 20%. Auto prices could soon fol-

low. The nation’s only major television

manufacturer Element Electronics an-

nounced it would close its factory and lay

of 126 workers because of the rising price

of Chinese components.

Conservative economists like Moore

hope that tarifs are merely a means to an

end giving Trump leverage to negotiate

deals that would result in freer markets.

“In my discussions with Donald Trump

it’s been about using the tarifs as a

bargaining tool” Moore says. “In the end

he wants to get to zero tarifs.”

But Navarro has a diferent view. He

advocates a permanent regime of tarifs

barriers and quotas to “balance” the

trade deicit discourage imported goods

and encourage domestic manufacturing.

The Administration’s actions as opposed

to its rhetoric are moving in that

direction. The renegotiated U.S.-Korea

trade agreement that was announced in

March would extend a 25%tarif on South

Korean trucks for 30 years. NAFTA talks

have reportedly stalled because U.S.

negotiators are demanding that autos be

built with 70% American steel to qualify

for duty-free treatment. At the WTO the

U.S. is blocking judicial appointments to

win freer rein to impose anti-dumping

duties. In Senate testimony in July Robert

Lighthizer the U.S. Trade Representative

acknowledged that the Administration

was not seeking zero tarifs with the E.U.

Trump appears to like where all this is

headed. “Tarifs are working big time” he

tweeted on Aug. 5 adding that the duties

would enable the U.S. to begin paying of

the $21 trillion national debt. Economists

mocked the notion but White House

sources say it is an argument Trump gets

directly from Navarro.

All this has alarmed conservatives in

Congress. “I don’t think the Adminis-

tration even fully knows what its trade

policy is” says Republican Senator Bob

Corker who has proposed a bill to curb

Trump’s steel tarifs. “They just wake up

in the morning and make it up.” GOP law-

makers CEOs and policy mavens have pa-

raded through the White House in a bid to

persuade Trump to change course. Trump

has waved them all away. He is sensitive

to the idea that the rural whites who com-

prise his political base might not like tar-

ifs. In July he announced a $12 billion ag-

ricultural bailout. But he’s convinced he

won’t lose their votes. At a July 31 rally in

Florida he lamented the efects of Chi-

na’s actions on farmers but said they were

willing to bear the pain. “Our farmers

are true patriots” Trump said. “And you

know what our farmers are saying? ‘It’s

O.K. we can take it.’”

Back in the 1990s Navarro lamented

Republicans’ appeal to these types of

voters. They relied he wrote on the

“fear-mongering trinity” of crime

illegal immigration and affirmative

action to get the votes of “frightened

seniors and white-and-angry blue-collar

men.” One such politician was then

California governor Pete Wilson who was

contemplating a run for President.

Navarro issued a stark warning. “This

man without core beliefs” he wrote

“wants to cynically ride a tidal wave of

white male rage and anti-immigrant

fervor right down the Potomac and into

the White House.” Even then he saw how

well it could work. □