Peter Navarro Says U.S. Has “Incredibly High Ground” in China Trade Talks

But the White House trade adviser deferred questions on future tariff plans to President Trump and Cabinet officials.

During President Trump’s first term, the American public and the world learned the hazards of dependence on China, but the second Trump administration’s tariff campaign is going to fix that vulnerability, White House Senior Counselor for Trade and Manufacturing Peter Navarro said during an event at the Council on Foreign Relations (CFR) this past Friday.

“Weakening our industrial base has never strengthened our strategic position. It has only invited aggression,” the Trump trade veteran said. “That’s why, in Trump World, we do not trade off economic security for national security. We believe economic security is national security.”

“You cannot project power if you surrender production,” Navarro continued. “You cannot deter aggression when your supply chains run through your opponents’ ports. You can’t lead the free world, if you can’t make what the free world needs.”

Increasing geopolitical instability has thrown this truth into stark relief as we’ve seen China establish itself as Russia’s key drone components supplier in its war against Ukraine.

Supply chain crises during COVID-19 also taught this hard lesson as hospitals grappled with staggering demand for basic personal protective equipment, like gloves and masks, without any domestic sources. Unfortunately, it’s just a matter of time before the world is hit with another deadly pandemic, and our medical supply chain remains deeply vulnerable when it comes to pharmaceuticals. New analysis from the nonprofit U.S. Pharmacopeia finds that nearly 700 U.S. medicines rely on at least one ingredient made exclusively in China.

This fall, President Trump announced this past month plans to impose pharmaceutical tariffs, which have seen been delayed. However, drug companies have been quick to respond by investing more than $350 billion in reshoring the U.S. pharmaceutical supply chain.

During his discussion with New York Times trade reporter Ana Swanson, Navarro declined to answer questions regarding President Trump’s proposed tariff hike on Chinese imports but highlighted that the United States has “incredibly high ground” in its trade negotiations with China.

“If the country that’s being tariffed has to be in our market or their economy is effectively going to collapse. What do you think they’re going to do? They’re going to eat the tariff, and that’s why, Ana, we didn’t observe all these alleged impacts,” Navarro said. “Steel and aluminum did great during the first term. We didn’t see any negative from that. If this were the first term, I’d have a hard time answering that question. It’s easy now. They were all wrong then. They’re all wrong now.”  

Though U.S. manufacturing has remained stagnant through this year’s trade restructuring, Navarro forecasted a jobs boom in months to come.

“We’ve got $19 trillion dollars of investment promised to come into this country,” Navarro said. “Now, construction is going to boom in the short run, but we’re not going to see the manufacturing jobs until that capacity gets built, so it’ll be six month, nine months, 12 months, 18 months, but what we’re doing is setting the stage for the construction of a beautiful addition to our manufacturing base.”

Watch the full CFR event here.