by Mish
Today China fired back with a “Trade Cooperation Warning” at Trump.
Mr Trump has chosen Peter Navarro, a Harvard-trained economist, to head the NTC, his transition team announced on Wednesday in news reported first by the Financial Times. The author of books such as Death by China and Crouching Tiger: What China’s Militarism Means for the Worldhas for years warned that the US is engaged in an economic war with China and should adopt a more aggressive stance — a message that the president-elect sold to voters across the US during his campaign.
“I read one of Peter’s books on America’s trade problems years ago and was impressed by the clarity of his arguments and thoroughness of his research,” Mr Trump said. “He has presciently documented the harms inflicted by globalism on American workers, and laid out a path forward to restore our middle class.”
The Trump transition team described Mr Navarro as a “visionary economist” who would “develop trade policies that shrink our trade deficit, expand our growth, and help stop the exodus of jobs from our shores”. His appointment is the second restructuring of trade policy that will see Mr Trump attempt to follow through on his focus to resurrect manufacturing, and create more industrial jobs, in the American economy.
Trade Visionary Blind
Peter Navarro may be considered a “trade visionary” but in reality he is blind.
The economic reality is simple: No one wins trade wars.
Today, China responded.
China has warned Donald Trump that “co-operation is the only correct choice” after the US president-elect tapped a China hawk to run a new White House trade policy office.
“Chinese officials had hoped that, as a businessman, Trump would be open to negotiating deals,” said Zhu Ning, a finance professor at Tsinghua University in Beijing. “But they have been surprised by his decision to appoint such a hawk to a key post.”
Adding to rising tensions between the two countries, the US Office of the Trade Representative yesterday put Alibaba, China’s biggest e-commerce platform, back on its “notorious markets” blacklist of companies accused of being involved in peddling fake goods.
China has been scrambling to assess Mr Trump’s stance since he took a congratulatory phone call from Taiwan president Tsai Ing-wen in early December, defying almost four decades of precedent. Under the “One China” policy, Washington has abstained from official interactions with the island, which Beijing regards as a “rogue province”.
Mr Trump’s recent rhetoric about China has given Beijing even more cause for concern. Since the call with Ms Tsai, he has publicly criticised China’s currency policies and island fortifications in the South China Sea. He has questioned Washington’s commitment to the One China policy, and also angered Beijing by alleging at the weekend that a Chinese warship had “stolen” a US navy submarine drone, which was later returned.
Global Trade Wars
I have been warning about the increasing likelihood of a collapse in global trade for some time.
We have taken another step down that road today with Trump’s appointment of Peter Navarro, to head up the White House National Trade Council.
It’s impossible to over-emphasize one simple point: No one wins global trade wars. Trump believes he can.
He won’t.
Mike “Mish” Shedlock
