Elon Musk called him “a moron” and “dumber than a sack of bricks” but he’s probably the most consequential economist in the world right now.
75-year-old Peter Navarro is the intellectual driving force behind global tariffs and Donald Trump’s attempt to rewire the global trading system.
He wangled his way into Maga hearts with his 2011 book “Death by China” (later a documentary) which paints China as the great Satan of world trade.
In it, Navarro argues that Beijing engages in unfair trade practices, from intellectual property theft and currency manipulation to product dumping and abusive labour standards.
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[ Donald Trump accuses China of violating US tariff truceOpens in new window ]
And, more importantly, that the US worker is the chief fall guy.
“If the Chinese vampire can’t suck the American blood, it’s going to suck the UK blood and the EU blood,” he told the Daily Telegraph last month while accusing the UK of being a “compliant servant of communist China”.
The Massachusetts-born economist played a role in the first Trump administration but his push for a more aggressive stance on China was crowded out by free trade conservatives (the US did impose tariffs on Beijing but they were limited in scope).
But Navarro is nothing but steadfast and he drinks the Maga Kool-Aid.
He took part in the Rudy Giuliani-led campaign to have the 2020 US election result overturned and spent four months in prison last year for refusing to co-operate with the congressional inquiry into the January 6th attack on the US Capitol.
His reward was to be appointed Trump’s senior counsellor for trade and manufacturing and to have his tariff agenda elevated to the heart of US trade policy, the source of so much global turmoil at present.
According to the New York Times and the Wall Street Journal, Navarro was the brains behind Trump’s reciprocal tariff formula presented by the president on a cardboard chart in the White House Rose Garden.
The formula, which has no precedent in economic theory, took the US goods trade deficit with a specific country, divided it by that country’s exports to the US, turned it into a percentage and then cut it in half to produce the tariff rate.
It generated weird outcomes. Madagascar, one of the poorest countries in the world, qualified for a punitive 47 per cent tariff on a modest $733 million of exports of vanilla, metals and clothing to the US.
Navarro is spearheading this protectionist drive or at least providing an economic rationale for Trump’s isolationist tendencies.
His standing in academic circles took a hammering a few years back when it emerged that he had fabricated one of the people frequently quoted in his books.
“Ron Vara” is cited in several of Navarro’s books mainly to make the case against China but Ron Vara was an anagram of Navarro, and was in fact Navarro citing himself.
He defended the fabrication as a “whimsical device” but it seems even his co-authors weren’t in on the joke and publishing companies are now adding advisory notes to his books.
Like many in the current Washington administration, Navarro was a fringe figure (he used to write get rich quick investment books) before being anointed by Trump.
If his views on tariffs are in the minority, his representation of China as the chief villain of the global trading system has become more mainstream and resonates strongly with Trump’s voter base.
The US has lost close to 5 million manufacturing jobs since 2001, the year China joined the World Trade Organisation (WTO).
The decline has been unprecedented by US standards and has created, or at least compounded, what’s often referred to as a Rust Belt from the Midwest to the Great Lakes, an area that spans from western New York to Michigan and north Illinois and encompasses states like West Virginia, Ohio and Indiana.
It was once the backbone of US industry, but it has now become synonymous with economic decline, population loss and urban decay.
You could argue that the US backlash against globalisation and politics currently playing out in Washington is largely a product of Rust Belt economics.
Navarro penned a chapter in Project 2025 (reputedly the ultraconservative blueprint for Trump’s second term) called “the case for fair trade” in which he makes the argument for action against what he describes as China’s “institutionalised aggression”.
And why the US’s big trade deficits (in goods) with other countries (Ireland is highlighted as having the seventh biggest) has been so damaging.
“These trade deficit statistics implicitly measure the large amounts of America’s manufacturing and defense industrial base and supply chains that have been offshored to foreign lands,” he says.
“Such offshoring not only suppresses the real wages of American blue-collar workers and denies millions of Americans the opportunity to climb up the rungs of the ladder to the middle class, but also raises the spectre of a manufacturing and defense industrial base that, unlike our experience in World Wars I and II, will not be able to provide the weapons and material that would be needed should America enter another major world war or seek to assist a major ally like Europe, Japan, or Taiwan,” he says.
The above passage encapsulates why many in the US see globalisation as a betrayal of the American dream and a fundamental attack on US hegemony.
