[BNY Times]| December 21, 2016 |
WASHINGTON — President-elect Donald J. Trump on Wednesday named a strident China critic, Peter Navarro, to lead a new White House office overseeing American trade and industrial policy, in the latest sign that Mr. Trump is moving to reshape relations between the world’s two largest economies.
Mr. Trump also said the billionaire investor Carl Icahn would serve as a special adviser on regulatory issues, another area of economic policy in which the president-elect wants big changes.
The appointments reflect Mr. Trump’s ambition to increase economic growth by hammering at what he regards as critical roadblocks. He has promised to expand American manufacturing by reducing federal regulation and by preventing what he has described as unfair competition from Chinese manufacturers. The choices of Mr. Navarro and Mr. Icahn also reflect Mr. Trump’s manifest preference for advisers who are loyal, and who do not have government experience.
Mr. Navarro, 67, a professor at the University of California, Irvine, who holds a doctorate from Harvard, is the only credentialed economist in Mr. Trump’s inner circle. He is the author of a series of jeremiads, including a 2012 documentary film, “Death by China,” in which an animation of a Chinese knife stabs a map of the United States and causes blood to run freely. Mr. Navarro has said that China is effectively waging an economic war by subsidizing exports to the United States and impeding imports from it. Mr. Trump, influenced by Mr. Navarro’s work, described this on the campaign trail as “the greatest theft in the history of the world.”
Mr. Trump has said he will persuade Beijing to change its policies by applying pressure, including designating China a currency manipulator; enforcing existing trade laws more vigorously; and, if necessary, imposing a 45 percent tariff on Chinese imports. In a statement, Mr. Trump described Mr. Navarro as “a visionary economist” and said he would “develop trade policies that shrink our trade deficit, expand our growth and help stop the exodus of jobs from our shores.”
A wide range of economists have warned that curtailing trade with China would damage the American economy, forcing consumers to pay higher prices for goods and services. Experts on manufacturing also doubt that the government can significantly increase factory employment, noting that mechanization is the major reason fewer people are working in factories.
Mr. Navarro’s appointment reinforces a basic division among Mr. Trump’s economic advisers. The people he has chosen to oversee trade policy, Mr. Navarro and Wilbur Ross, another billionaire investor, both favor increased trade restrictions. But Mr. Trump’s broader circle of advisers is dominated by proponents of free trade, including Mr. Icahn; Gary D. Cohn, the president of Goldman Sachs, who will lead the National Economic Council; Rex W. Tillerson, the chief executive of Exxon Mobil, who was tapped for secretary of state; and Gov. Terry Branstad of Iowa, Mr. Trump’s choice for ambassador to China. Mr. Trump is also considering the appointment of Larry Kudlow, a strong proponent of trade, to lead his Council of Economic Advisers.
Mr. Trump has also promised to edit the federal rule book, removing what he has described as overly burdensome restrictions. He said last month that the government would eliminate two regulations for each new rule it put on the books. For Mr. Icahn, who will not draw a salary, the new role formalizes his relationship with Mr. Trump, whom he advised on economic issues throughout the campaign. Mr. Icahn, 80, has no experience in government; like a growing number of Mr. Trump’s appointees, he was prized for his success as a businessman.
Mr. Icahn, a brash New York billionaire who vocally supported Mr. Trump during the campaign, made his fortune as a “corporate raider,” buying stakes in corporations and demanding changes to reward shareholders. “Carl was with me from the beginning, and with his being one of the world’s great businessmen, that was something I truly appreciated,” Mr. Trump said in a statement. “His help on the strangling regulations that our country is faced with will be invaluable.”
Mr. Icahn will also play a role in the selection of a new chairman for the Securities and Exchange Commission, the regulator that serves as the referee for his battles with corporations.
Mr. Icahn, the child of two New York schoolteachers, was not known for political activism before the 2016 campaign, and he has insisted that he wants to help the country, not himself. But Mr. Trump’s choice of a major corporate investor to play a role in rewriting regulations that could affect those companies renewed concerns about conflicts of interest in the next administration.
“The corrupt nature of this arrangement cannot be understated,” Eric Walker, a spokesman for the Democratic National Committee, said in a statement about Mr. Icahn’s appointment. “Voters who wanted Trump to drain the swamp just got another face full of mud.”
Mr. Navarro has built a quiet career as an academic economist, publishing papers on subjects like why businesses give to charity, electricity deregulation and the economics of trash collection.
He also mounted four unsuccessful political campaigns as a Democrat between 1992 and 2001, including candidacies for mayor of San Diego and a House seat in Congress.
He has said that he started paying attention to China in the early 2000s because he noticed that graduates of the business school at California, Irvine, were starting to lose jobs as a result of globalization. In 2011, he wrote a letter to Mr. Trump about his book “Death by China,” which the movie was based on, and the men began to correspond. Over the past year, Mr. Navarro became an increasingly important campaign adviser on economic issues. But he and Mr. Trump had not met in person until September.