On Wednesday, President-elect Donald Trump announced his appointment of Peter Navarro as his senior counselor for trade and manufacturing. Based on his record during the first Trump administration and his extensive rhetoric, that means Navarro is being brought in to help implement some really bad ideas about trade.
Navarro, a professor emeritus at the business school of the University of California, Irvine, has had an unusual political history.
In the 1980s, while completing a doctorate in economics, he wrote a book called “The Policy Game” in which he clearly described the problems with tariffs, economic protectionism and the deleterious spiral caused by trade wars: “If the world is, in fact, sucked into this spiral, enormous gains from trade will be sacrificed. While such a sacrifice might save some jobs in sheltered domestic industries, it will destroy as many or more in other home industries, particularly those that rely heavily on export trade. At the same time, consumers will pay tens of billions of dollars more in higher prices for a much more limited selection of goods.”
In the 90s, he became known as an ardent, even strident progressive who ran for political office several times down in San Diego. He never won.
At some point, Navarro went so far around the political horseshoe that he emerged as Donald Trump’s validator for anti-trade policies. Gone were his insights into the economic benefits of global trade and the harms of economic protectionism. In their place were uncritical enthusiasm for tariffs, no matter the consequences.
Back in 2017, he was a cheerleader for Trump’s tariffs on China, insisting to CNN’s Jake Tapper that only China would pay the cost of the tarifs. “China is bearing the entire burden of the tariffs,” Navarro said. “There is no evidence whatsoever that American consumers are paying any of this.”
As Reason Magazine’s Eric Boehm helpfully notes, “The data, of course, say the exact opposite.” Continues Boehm, “The U.S. Trade Commission concluded in 2023 that American companies and consumers ‘bore nearly the full cost’ of the tariffs Trump levied on steel, aluminum, and many goods imported from China.”
Navarro was also wrong when he claimed in 2018 that, “I don’t believe any country in the world is going to retaliate for the simple reason that we are the most lucrative and biggest market in the world.” In fact, they did, yielding economic harm to everyone involved, just as Navarro understood back in the 80s.
Related Articles
We’re skeptical that another homelessness bureaucracy is the answer in Los Angeles
Jay Bhattacharya a brilliant pick to lead the National Institutes of Health
Politicizing the FBI is wrong way to fix it
Way too many bills in the state Legislature
Biden’s pardon of Hunter a gross injustice
Alas, Navarro is in Trump’s circle not because he’s accurate in his views, but because he shares the same flawed views as Trump when it comes to trade.
If Trump and Navarro want to help American workers, they would stop the tariff talk and focus on deregulation, ensuring tax rates at home are globally competitive and modernizing American ports to better facilitate global trade. Don’t cut off your nose to spite your face. Don’t punish importers to show the world you’re “tough” on trade.
The world is made richer through free trade. American consumers and businesses benefit every single day from lower prices and a vast diversity of goods. Buying into retrograde protectionism ignores those benefits and will cost American consumers and businesses greatly.