When the documentary film Death By China opened in 2012, it received dismissive reviews, including one calling it "the documentary equivalent of a raving street-corner derelict", says The New Yorker. One viewer, though, loved the dark warnings of the dangers posed to American blue-collar communities by China's economic and military rise. "Death by China is right on," wrote Donald Trump in a blurb. "This important documentary depicts our problem with China with facts, figures and insight. I urge you to see it."
Five years later and Trump is now US president and the film's maker, Peter Navarro, is his trade guru. Lauded by Trump as a "visionary", he is arguably the most powerful economic adviser in the world, providing "a patina of respectability" to Trump's team of billionaires with his Harvard PhD.
"Navarro's basic idea is that countries such as China, Japan and Germany have rigged the trade system against the US" by using "currency manipulation and other underhand tricks" to build large export surpluses, says the CapX website. More broadly, he sees trade "not as a win-win but as a zero-sum game": exports are good and imports are bad, and "the goal of America's trade policy should be to maximise the former and minimise the latter". The problem, as many people have pointed out, is that this kind of mercantilism doesn't make sense. Yes, it's nice to have strong exports, but imports serve the "fundamental function" of making things cheaper for consumers. Indeed, "any type of trade, even on horribly unfair terms, is axiomatically better than no trade at all". That's anathema to Navarro, who views China as the world's central problem. "Until the trade issue is fixed," he says, "there can be no prosperity in the global economy."
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Now 67, Navarro graduated from Tufts University in 1972 and joined the Peace Corps in Thailand for three years before embarking on his academic career. In the 1990s he ran for office several times as a Democrat, losing every race. For the last 20 years Navarro has been professor of economics and public policy at the University of California, Irvine and he has written a popular book about investing, If It's Raining In Brazil, Buy Starbucks.
But his ponderings have rarely appeared in top-tier academic journals, says The Economist. He is "fond of hyperbole". His TV appearances "can deteriorate into rumbustious shouting matches" and when he sends emails, his screen name appears as "ComingChinaWars". Even more alarming than Navarro's "banana economics" are the measures he and Trump are prepared to take to implement them, says CapX. Bang go multilateral treaties. Bang, too, goes the authority of the World Trade Organisation. What they seem to be proposing is "a world in which there are no rules". "Ever since his election victory, people have been arguing that Donald Trump is the most dangerous man in the world. They're wrong, it's Peter Navarro".
-
-
Act now: First Direct’s £175 switching bonus ending soon
First Direct has launched a £12,500 prize draw on top of its £175 cash bonus - but they both finish soon, so you’ll need to be quick
-
Credit card providers slash 0% balance transfer deals
Customers face a double whammy of rising interest rates and shorter 0% balance transfer periods. We look at what’s going on in the credit card market and why you’ll need to act fast to get the top 0% balance transfer deal
