clock menu more-arrow no yes mobile

Filed under:

I read Trump's trade adviser's anti-China book. It’s wilder than you can imagine.

Peter Navarro doesn’t want you to buy anything made in China.

Photos: Getty Images, Photoillustration: Javier Zarracina/Vox

Peter Navarro doesn’t want you to buy toys that were made in China, because he believes they’ll poison your children. He doesn’t want you to buy pajamas sewn in China, because he thinks they could catch on fire. He doesn’t want you to buy phones that were assembled in China, because he believes they could explode and kill you. In fact, he doesn’t want you to buy anything at all from China, because he thinks every dollar the country receives will be spent on trying to destroy the US.

Navarro isn’t the disheveled eccentric you might find lurking on the fringes of a political demonstration, eagerly trying to stuff handmade pamphlets about the perils of globalization into your palm. He’s one of the most powerful economic officials in the Trump administration.

Navarro is the director of the National Trade Council, a newly created office in the White House. He’s one of the main figures shaping the administration’s trade policy as it struggles to balance the GOP’s traditional commitment to free trade with Trump’s stated belief that countries like China are gaming the system to improve their own economies at the expense of America’s working class.

The stakes in the new administration’s raging internal debate about trade are enormously high. If trade traditionalists like former Goldman Sachs President Gary Cohn, director of the National Economic Council, win out, the way Washington does trade could carry on fairly similarly to the way it has for decades.

But if Navarro and White House Chief Strategist Steve Bannon get their way, the Trump administration could potentially end up severely weakening the World Trade Organization and slapping big punitive tariffs on other countries in a forceful bid to restore American primacy in the trade world. Given that some of those tariffs could spark trade wars, it’s not an exaggeration to say millions of American jobs hang in the balance. It’s far from clear which side will ultimately prevail, but the president has taken Navarro’s side during recent skirmishes in the West Wing over how to move forward on trade.

Superficially, the two men couldn’t appear more different. Navarro is a Harvard-educated economist and tenured professor at the University of California with an eye for policy details. Trump is a brash businessman who loves being on television and proudly brandishes his ignorance of how public policy works.

But they have more in common than you’d think — indeed, Navarro’s personality has been described by people close to him as a carbon copy of Trump’s.

Navarro has a flair for showmanship and adversarial bravado, and he revels in defying the status quo. During his many unsuccessful runs for public office in California prior to coming to Washington, he developed a reputation for being less than fair in his use of smear tactics. “I still have some principles,” Navarro wrote in San Diego Confidential in 1998. “But not as many as you might think because I don’t have any concern at all about making stuff up about my opponent that isn’t exactly true.” He’s already brought that ethos to the job, accusing vital allies like Germany of suppressing the value of the euro to gain a trade advantage over the US (something that Germany cannot, and is not, doing).

“They’re two peas in the pod, I’m telling you,” Beckie Mann, who managed Navarro’s unsuccessful bid for mayor of San Diego, told Politico magazine while comparing Trump and Navarro.

But their shared anxiety over China is where they connect most deeply, and it goes back many years. Trump lists Navarro's 2006 book The Coming China Wars as No. 6 on his list of "hundreds of books" he claims he’s read about China. Trump was also a big fan of Death By China, Navarro’s 2012 documentary that was based on the 2011 book he co-wrote with Greg Autry by the same name. In fact, Trump’s praise for the film graces the top of the documentary’s official website: “DEATH BY CHINA is right on. This important documentary depicts our problem with China with facts, figures and insight. I urge you to see it.”

The image below, which features a dagger labeled “MADE IN CHINA,” is an actual scene from the opening sequence of the documentary.

This is an actual scene from the opening sequence of “Death by China.”

I read Death by China, Navarro’s most iconic anti-China text, to get a better sense of his worldview — and what Trump finds so appealing about it. It’s an important thing to understand, because Navarro will play a direct role in shaping the young administration’s way of approaching America’s only true global rival. He’s already delivered a speech on how the trade deficit with China is a national security threat, and helped roll out an unprecedented executive order on bringing down the trade deficit that Chinese president Xi Jinping, who is visiting with Trump at Mar-a-Lago this week, is sure to have read as an aggressive gesture. (The White House did not respond to a request for comment on this article.)

But it turns out that Navarro’s rabble-rousing in Washington about China and trade so far is fairly mild compared to the full scope of his beliefs about the country. Navarro is terrified by China, which he sees as a “heavily armed, totalitarian regime intent on regional hegemony and bent on global domination.” He looks at it through the kind of lens that Washington once considered the Soviet Union.

And he’ll be the first to tell you that the US should be ready to go to war with China at any moment.

Navarro is consumed by an existential fear of all things Chinese

Navarro possesses a striking blend of animosity and paranoia about anything have to do with China. In Death by China, which he deems his “survival guide” to outmaneuvering “the planet’s most efficient assassin,” he warns the reader against ever purchasing Chinese products.

“Unscrupulous Chinese entrepreneurs are flooding world markets with a range of bone-crushing, cancer-causing, flammable, poisonous, and otherwise lethal products, foods, and drugs,” he warns.

At one point, Navarro asks the reader to engage in a cautionary thought experiment and — using a military phrase popularized during the Vietnam War — imagine that “your best friend is ‘fragged’ when the [Chinese-made] cell phone in his chest pocket explodes and sends bone shrapnel into his heart.”

Navarro also argues that investing in the Chinese economy is hugely dangerous for the US because China is a totalitarian regime fixated on becoming the world’s sole superpower. He accuses Beijing of using “weapons of job destruction” against the US, such as devaluing its currency in order to make Chinese products cheaper inside the US and make American products more expensive in China. It’s all part of a strategy, he writes, for China “to pick off America’s industries job by job.”

China’s ongoing military build-up, meanwhile, is so startlingly swift in Navarro’s eyes that he is sure the US is destined to perish at the hands of the Chinese Communist Party unless it starts becoming more aggressive with Beijing. He believes the Pentagon is not properly prepared for the reality that “China that can churn out hordes of ships, tanks, and planes on its factory floor,” and thinks defense spending needs to be more strategic to recognize that reality.

He also argues that Chinese cyberhacking operations against the US should be considered acts of war. “The ultimate policy question,” he writes, “is whether we are going to consider China’s ‘hacks’ as the acts of war they really are — or whether we are simply going to keep sticking our heads in the sand and see no Red Hacker brigade evil.”

Many of Navarro’s arguments stem from reasonable concerns about how the world should react to China’s tremendous rise from an economically dysfunctional country to a sophisticated manufacturing colossus that benefits from being plugged into the global economy but is reluctant to play by many of its rules.

But there’s always some point in Navarro’s analysis where he veers off the path of rational concern and starts to careen through a wilderness of all-consuming fears about China’s true intentions. Aided by cartoonish and frequently offensive stereotypes of the Chinese national character, Navarro tends to believe that there is something fundamentally underhanded and evil about China, regardless of any evidence to the contrary.

Those aren’t widely-shared views, to put it mildly. Adam Davidson wrote in his profile of Navarro in the New Yorker last year that “Navarro’s views on trade and China are so radical, however, that, even with his assistance, I was unable to find another economist who fully agrees with them.”

China as the world’s biggest cheat

The centerpiece of Navarro’s economic analysis of China — which he persistently refers to simply as “the Dragon” — is that the combination of its unrivaled size and its willingness to ignore countless norms and rules of the international economy make it a dire threat to workers in the US.

Navarro believes China “cheats” its way to the top. He slams its government for subsidizing its exports in violation of World Trade Organization rules, mandating that American companies hand over key intellectual property to enter the Chinese market, and having exceptionally poor consumer safety standards, environmental regulations, and labor protections.

In particular, he’s concerned about the way that the government has deliberately suppressed the value of its currency, the yuan, which makes Chinese exports cheaper in global markets and makes American imports to China more expensive.

Navarro declares that China’s trade practices have allowed it to gain such advantage over US companies and workers that it’s been able to pull off one of the “greatest heists in global economic history.”

Navarro correctly identifies certain challenges the US faces with China, but often quickly goes over the edge. There have of course been many recklessly made, highly hazardous Chinese products in the past, like lead-filled toys, toxic toothpaste, tainted milk, and defective tires.

But his claim that all Chinese products should be avoided because they’re likely to imperil your safety — or literally kill you — are clearly overstated. The billion-plus iPhones circulating the world that were assembled in China, for example, don’t seem to be posing an existential threat to the human race (accidents from walking and driving while texting not withstanding).

Nor do many of the other claims he makes stand up to scrutiny. For instance, Chinese manufacturing doesn’t always win out over American manufacturing because its government subsidizes an industry, like it does with aluminum, but often simply because Chinese workers are paid lower wages and have fewer legal rights in the workplace than American workers. The reality, says Doug Irwin, a trade scholar at Dartmouth College, is that in addition to unfairly subsidized industries, China “also does a lot of straightforward bilateral trade with the US where they simply have a cost advantage.”

China’s past currency manipulation is a particular obsession of Navarro’s, which makes sense given when the book was published. Around the time the book came out in 2011, China had been buying up dollars to keep the value of the yuan low on and off for many years.

But what’s strange is that Navarro still believes it’s an issue today. In a white paper he co-wrote during the 2016 presidential campaign with Wilbur Ross, now Trump’s Commerce secretary, Navarro argued that China should be declared a currency manipulator as a first step toward slapping an array of punitive tariffs on it.

It’s very likely that Navarro has played a role in Trump’s repeated criticism of China for suppressing the yuan — which he’s done as recently as February. This has put Beijing on edge: In January, the hawkish Chinese government-owned Global Times newspaper promised to use “big sticks” against the Trump administration should it attempt to begin a trade war with tariffs. That same month, the China Daily, another government-owned newspaper, accused Navarro of being “deaf and blind” to trade benefits.

And it seems China may actually have a point: Right now, China’s manipulation of its currency actually favors US exports. That’s because as China’s growth is slowing and foreign investors are pulling out of the country, economic currents are pushing the pressure on the yuan downward, and Beijing is now intervening in order to prop the currency up.

China’s foreign reserve has dropped from $4 trillion to $3 trillion in just the past two years as they’ve sold off foreign currency to keep the yuan from depreciating too swiftly. In other words, they’re actively making sure that their currency isn’t dropping, which makes their products more expensive than they would be otherwise. It also makes US exports to them more affordable to Chinese consumers.

“If anything, we should be thanking the Chinese lately,” Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics, told me during an interview in February.

In other words, it’s the exact wrong time to pursue punitive tariffs against China for manipulation.

Navarro is certain that China alone is the source of worker misery in the US

Getty Images

Another striking element of Navarro’s analysis is that he’s convinced that China and China alone is to blame for the plight of American workers who are unemployed and underemployed due to upheavals in the manufacturing sector. He believes that bringing manufacturing jobs back from China is a key way to bring down the US unemployment rate.

Once again, Navarro’s argument has a substantial kernel of truth. China has caused big job dislocations in the American manufacturing sector since it joined the WTO in 2001. About a million US workers lost their jobs due to increased manufacturing competition from China between 2001 and 2007, according to work from leading economists David Autor, David Dorn, and Gordon Hanson. As Autor and his collaborators’ work has shown, those workers have struggled to find jobs in new sectors, and their communities have suffered enormously because of it.

But China can’t be blamed for everything. Autor estimates that China accounts for about 40 percent of the decline in manufacturing between 2000 and 2007. Navarro appears uninterested in engaging with the factors contributing to the other 60 percent of that decline.

Crucially, Navarro offers no discussion in Death by China of the widely-documented role that automation — the development of more sophisticated machinery and robots — has played in the slow but steady decline in American manufacturing.

US factories now manufacture twice as much as in 1984 — but do it with one-third fewer workers. Robots are to blame for the loss of nearly 750,000 manufacturing jobs between 1990 and 2007, according to a new paper from Daron Acemoglu of MIT and Pascual Restrepo of Boston University.

That means that US manufacturing won’t bounce back to its former levels even if Navarro and Trump succeed in bringing some jobs back from China, for one simple reason: Robotics means that American companies simply need far fewer human employees.

Brookings Institution

And while a lot of American manufacturing jobs did get shipped to China, that country has not been the only competitor to the US, and in the future it won’t even be the most serious one. Southeast Asian countries like Cambodia and Laos have far cheaper wages than China, where salaries are approaching rates seen in Europe, and the region is ultimately en route to overtake China as the world’s cheapest factory. Navarro may see China as the enemy, but it’s not the only country competing with the US for manufacturing jobs — and those nations pose bigger long-term threats for some jobs.

Navarro ultimately sees the US trade relationship with China as zero sum. “It doesn’t work if one country cheats on the other,” he writes. “The ‘positive sum’ game in which both countries are supposed to win quickly devolves into a ‘zero sum’ game with one big prosperous winner and one big recessionary loser.”

That’s simply not true. The reality is even with China engaging in unfair practices, the US has reaped many benefits from enhanced trade with it. Since 2000, China has leapt from the 11th-largest export market for the US to the third-largest one. China’s purchase of American-made goods supports 1.8 million jobs in the US, according to an Oxford Economics report.

American consumers, meanwhile, directly benefit from cheap Chinese goods. China saves typical American households up to $850 a year, and that extra money gets spread across the economy and helps keep people employed in a variety of domestic industries.

The interconnectedness of the US and Chinese economies are why the vast majority of economic observers think that both countries should do whatever they can to avoid the outbreak of a trade war. Setting off a battle of punitive tariffs by taxing incoming goods from the other country would be a lose-lose for both economies.

When I asked Autor, the economist who documented China’s big effect on American workers, what he thought about the Trump administration’s interest in tariffs, he called it “naive and uninformed.” And that’s coming from an economist who is probably more sympathetic to Navarro’s diagnosis of the negative effects of China’s rise than most.

Navarro thinks a war-like stance toward China is wise

A US navy crew member scoping out the South China Sea.
Getty Images

Navarro doesn’t only want to crackdown on China’s economic practices in order to boost the American economy. He also believes slowing China’s growth is essential to taming its military might and ambitions for global dominance.

On this front, his views — which include calling for the US to colonize the moon with American-style capitalism before China turns it into a communist stronghold — become particularly difficult to follow. Here are some choice passages from his book’s reflections on China’s military rise:

  • “We — along with Europe, Japan, and the rest of the world—also need a ‘Winston Churchill moment’ that wakes us to the growing dangers of a heavily armed, totalitarian regime intent on regional hegemony and bent on global domination.”
  • “America must recognize that China is putting the United States in the same role that Germany played facing Roosevelt’s America in World War II.”
  • “[China] is arming itself to the teeth so it can sink our Navy and shoot our satellites out of the sky and have its way with the world.”

There’s a lot to unpack there — and a lot that many experts flatly dismiss.

First, there’s the question of whether China is actually on the brink of developing weapons that would be more advanced than what’s in the US arsenal, as Navarro suggests throughout the book. David Kang, a professor of international relations at the University of Southern California who studies security in Asia, told me that China is “decades away” from catching up to the US.

“China has one aircraft carrier that barely works, the US has 11,” Kang said. “China has around 260 nuclear warheads, we have 4,600.”

And China is not taking steps to close that gap any time soon. “The US still devotes almost twice the proportion of a much larger economy (3.3 percent) to its military than does China (1.9 percent),” Kang told me. “On an absolute basis, that’s even greater: the US spent $596 billion in 2015, China is estimated to have spent $214 billion.”

That’s a reflection of the fact that China mainly shows signs of wanting regional dominance, not the kind of global supremacy Navarro worries so much about.

“China wants to check American influence in Asia, which is challenging but not existentially worrisome,” Jessica Chen Weiss, an expert on Chinese nationalism at Cornell University, told me. There’s one key spot where that could play out: the South China Sea, where China has been making territorial grabs for years, much to the chagrin of its neighbors.

Kang says that the US and China need to move carefully to avoid coming to blows over the South China Sea. But he doesn’t think China will be capable of destroying the US itself anytime soon. “I’m not sure how that could possibly happen, even under the most extreme of circumstances,” he said.

And, just as importantly, it’s unclear why that would happen. China is modernizing rapidly and re-emerging as a major global power, and its military is growing far stronger as it makes that journey. But there’s no evidence that its increasing military might is evidence of anything more than the typical efforts a state makes in order to pursue its self-interest in the world.

Unlike the Soviet Union during the Cold War, China offers no grand ideological alternative to the US — its economy is heavily state-influenced, but it’s ultimately a market economy and will likely continue to be one. And it shows no signs of wanting to remold the world in its own image or engage in proxy wars with the US, like Russia is arguably doing in both Ukraine (where it is arming separatists waging war with Kiev’s Washington-backed government) and Syria (where it’s propping up the Assad regime and sometimes bombing the US-backed rebels working to unseat him).

Navarro’s jumpiness about China’s power is troubling. Trump trusts him instinctively, similarly to the way he trusts Bannon, who himself is no fan of China and has talked repeatedly in the past about going to war with it in the South China Sea. So far, Trump’s bark has been bigger than his bite when it comes to his relationship with China. But some sort of crisis with Beijing could arise at any moment. And if it comes, Navarro will be one of those whispering to Trump to react with extreme force. China, he believes, can never be trusted.

Sign up for the newsletter Sign up for Vox Recommends

Get curated picks of the best Vox journalism to read, watch, and listen to every week, from our editors.