War Erupts Between Trump’s Two Top Trade Advisors Over China

Commenting on the latest, surprise escalation in the US-China trade ceasefire war, in which Trump unexpectedly announced 25% tariffs on up to $50BN in Chinese imports, prompting a fresh round of outrage and confusion in Beijing which was confident it was done with Trump’s “flip-flopping”, we observed that “the latest move by Trump signals the more hawkish wing of Trump’s trade team is trying to amplify its hard line, after Treasury Secretary Steven Mnuchin said this month that any talk of a trade war was suspended for now.”

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“Mnuchin’s ‘trade war on hold’ comments look to have been repudiated,” said Derek Scissors, a China analyst at the American Enterprise Institute in Washington. “It may be the administration has shifted somewhat to appease the Congress on the lifting of the ZTE sanctions.”

Which, we concluded, begs the question:

is China trade hawk dragon Peter Navarro back in Trump’s good graces, and if so, is the countdown to Mnuchin’s resignation officially on?

Then just moments later, none other than Peter Navarro himself confirmed that there may be another major battle behind the scenes, when in a rare public rebuke of Steven Mnuchin, Navarro – who the media recently relegated to D-grade advisor status when he was excluded from China talks after reportedly exploding at Mnuchin and Wilbur Ross two weeks ago – called Mnuchin’s claim that the trade war with China was “on hold” an unfortunate sound bite” and admitting that there’s a dispute that needs to be resolved.

“What we’re having with China is a trade dispute, plain and simple,” Navarro said in an interview broadcast Wednesday with National Public Radio. “We lost the trade war long ago” with deals such as Nafta and China’s entry into the World Trade Organization, he said.

Navarro also said that “we can stop them from putting our high tech companies out of business” and “buying up our crown jewels of technology…. Every time we innovate something new, China comes in and buys it or steals it.”

Earlier this month, Mnuchin shocked markets and sent stocks surging after he said in a weekend televised interview that the prospect of a trade war with China was “on hold.” It turns out, Mnuchin was merely saying whatever someone had told him to say.

The latest controversial remark from Navarro, who refuses to go gentle into that good night, came just days before U.S.  Commerce Secretary Wilbur Ross is scheduled to meet with his counterparts in Beijing to discuss ways to reduce the U.S.’s trade deficit with China, and – as noted earlier – follows Trump’s surprise announcement that the U.S. is moving ahead with plans to impose tariffs on $50 billion of Chinese imports and curb investment in sensitive technology.

The renewed tariff threats could stop the planned talks and jeopardize a deal, the WSJ reported on Wednesday, citing sources in both countries. A team of U.S. officials was scheduled to arrive in Beijing on Wednesday. Asked about potential Chinese retaliation, especially on American farm goods, Navarro said “we’re ready for anything.”

As for the implications of this growing trade advisor war in Trump’s inner circle, two weeks ago Bill Blain wrote that “Mnuchin’s Name Is Now High On The Trump Deadpool List” and come to think of it, it has been a while since Trump fired anyone…



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War Erupts Between Trump’s Two Top Trade Advisors Over China