On Armistice weekend, no letup on Trump trade war with China — or US business

While most of the US was commemorating Armistice weekend, the Trump administration was ratcheting up its looming trade war with China — and, for good measure, with the US business community, labeling dissenters “unpaid foreign agents.”

From left, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, United States Trade Representative Robert Lighthizer, and Economic Adviser to the President Peter Navarro wait for President Donald Trump to make an announcement on tariffs at the White House in Washington, DC March 8, 2018 – via REUTERS

On China, late last week Rob Joyce, the top cybersecurity official at the White House National Security Council, publicly charged that Beijing — and by direct inference, President Xi Jinping — has violated the commitment made in 2015 to President Barack Obama that China would in the future refrain from passing the fruits of economic espionage along to Chinese high-tech companies. Specifically, Joyce told the Aspen Cyber Summit that “it is clear they [China] are well beyond the bounds of the agreement today that was forged between our two countries.” Joyce’s statement represents the first direct accusation by a US official that Beijing has reneged on its commitment with flagrant violations of the 2015 accord. As I have pointed out previously, this now public charge makes it imperative for President Trump to confront President Xi at the upcoming G20 summit in Buenos Aires with evidence of the perfidy and an explicit vow to retaliate against future attacks.

Of course, this being the Trump administration, after having attacked a potential foe, it turned its verbal guns on its own allies — in this case the US business community, and particularly “Wall Street billionaires.” In a speech Friday at the Center for Strategic and International Studies, White House Trade Adviser Peter Navarro blasted business leaders for pushing the administration to reach a deal with China at the G20 summit. Navarro stated bluntly: “I would urge these unpaid foreign agents to stand down. . . . But if Wall Street is involved and continues to insinuate itself into these negotiations, there will be a stench — a stench around any deal that’s consummated because it will have the imprimatur of Goldman Sachs and Wall Street.” Further, he charged that as “unpaid foreign agents,” they were “part of a Chinese government influence operation” to “weaken the president and his negotiating position” in order to force a bad deal at the G20 summit.

Wall Street is often the whipping boy for demagogues (usually from the left), but Navarro’s denunciation had implications well beyond lower Manhattan. Numerous business organizations, including the US Chamber of Commerce, the National Foreign Trade Council, and the US-China Business Council, among others, have expressed hope that Trump and Xi can reach some accommodation in Buenos Aires.

Navarro’s blunt criticism produced a scramble at the White House to attempt to make clear he was not speaking for the president. (On Tuesday morning, National Economic Council Director Larry Kudlow criticized Navarro as “way off base.”) And The Wall Street Journal Editorial Board excoriated the White House adviser for “an extraordinary threat against private American citizens,” with the implication that they were “traitors.” This was, the newspaper argued, “a page straight from the Politburo playbook in Beijing.”

Despite all the adverse uproar, at this writing the president is back in the White House with no visible anger over the exchanges and Navarro sits unrepentant in his office. Still, it should be noted that White House staff, like Henry VIII’s wives, risk beheading at any moment.

Finally, over the weekend it was reported that Treasury Secretary Steve Mnuchin and his Chinese counterpart, Vice Premier Liu He, had begun talks with the hope of reaching some agreement, or at least a ceasefire on the trade front, at the upcoming meeting between the two leaders. My view is that whatever his abrasive arrogance, Navarro (and US Trade Representative Robert Lighthizer) are correct on one significant point: A deal in which the Chinese agree only to buy billions and billions more of US products, while refusing to budge on issues of mercantilist protectionism and outsized high-tech subsidies, would be a very bad outcome for the United States. But alas, like Henry VIII, our president is transfixed by elusive baubles such as the (unattainable) Chinese promise of an ever-lower trade deficit. So stay tuned.