White House Advisor Peter Navarro’s Disastrous Influence On the Economy

If recent history is any guide, one of the obstacles to an economic rebound from the coronavirus pandemic will be whether Peter Navarro, President Trump’s economic Svengali, continues to unduly influence American economic policy.

Navarro serves as the Director of Trade and Manufacturing Policy for President Trump. Since being brought on to serve as President Trump’s trade and manufacturing expert, Navarro has been thwarting U.S. economic growth every step of the way.

Unfortunately for America, Navarro’s influence appears to be growing. President Trump recently gave him the additional responsibility of serving as the head of economic planning under the Defense Production Act.

Navarro hands China a victory

China and the World Health Organization (WHO) deserve to be criticized for their response to the coronavirus outbreak. Had China shared more information sooner, American lives could have been saved. China refused to allow the U.S. Centers for Disease Control and Prevention (CDC) to provide assistance, and failed to share complete and transparent information about the threat.

But after the coronavirus pandemic hit, Navarro handed a huge victory to communist China by advocating policies that make the United States—not China—look like the bad guy.

Instead of leading efforts to prevent countries from imposing barriers to exports of personal protective equipment (PPE), pharmaceuticals, and other needed goods, the United States imposed limits of its own. According to an April 3 presidential memorandum, “To ensure that these scarce or threatened PPE materials remain in the United States for use in responding to the spread of COVID-19, it is the policy of the United States to prevent domestic brokers, distributors, and other intermediaries from diverting such material overseas.”

Navarro is now reportedly drafting a “Buy America” order for medical goods designed to further restrict trade in the future.

Thanks to Navarro, countries that should be angry at China for its role in the coronavirus pandemic are instead directing their anger toward the United States. A Politico headline summed things up: “‘Lord of the Flies: PPE Edition’: U.S. cast as culprit in global scrum over coronavirus supplies.”

Weakening the U.S. COVID-19 response

American pharmaceutical manufacturers have had to divert resources from working on a cure and vaccine for COVID-19 to fend off attacks from Navarro and possible new Buy America mandates. Navarro said: “The global Big Pharma lobby which has moved all of our production offshore is now lying about an executive order they haven’t read.”

This is an example of how the President is poorly served by Navarro’s counsel: According to the U.S. Bureau of Labor Statistics, 294,250 Americans work in the pharmaceutical manufacturing industry.

While Navarro once said his role was to validate President Trump’s intuition, which is “always right,” he seized on the coronavirus crisis as an opportunity to undermine President Trump’s intuition and replace it with his own policy preferences.

For example, President Trump’s intuition was to avoid use of the Defense Production Act: “But you know, we’re a country not based on nationalizing our business. Call a person over in Venezuela, ask them how did nationalization of their businesses work out? Not too well.”

Just a few days later, he appointed Navarro to lead economic planning efforts under the Defense Production Act.

According to Navarro, “We wouldn’t be having this problem if we had the domestic production of essential medicines, medical countermeasures, medical supplies like masks and medical equipment like ventilators. If we made it here, we wouldn’t be faced with this.”

In fact, there is no reason the United States cannot plan ahead to maintain full stockpiles of medical equipment, regardless of where the equipment is made. Moreover, as Chad Bown of the Peterson Institute noted: “US tariffs on imports from China have threatened to cause shortages of vital medical products used to fight COVID-19.”

According to an April 12 Wall Street Journal report: “Companies asking for exemptions from the Trump administration’s tariffs on Chinese imports say widespread shortages of hand sanitizer, disinfectants and other products needed to combat the spread of the coronavirus are being exacerbated by the levies.”

To view the full report, click here.