DAVID GREENE, HOST:
The story of the U.S.-China trade war is not new, but this new phase of the war could be different because you might be more likely to feel the effects. President Trump has threatened more tariffs, this time a 10% tariff on $300 billion worth of Chinese imports. And the list includes laptops, smartphones, sandals, toys, power tools, stuff that you might buy. The president made a threat after trade talks between the two countries made little progress this week, and we have President Trump's chief trade adviser on the line with us from the White House.
Peter Navarro is assistant to the president and director of the Office of Trade and Manufacturing Policy. Mr. Navarro, welcome back.
PETER NAVARRO: Thanks, Mr. Greene.
GREENE: So if the president follows through on the threat here, could this start to get too personal for Americans who would be paying higher prices on this stuff?
NAVARRO: Not at all. We've seen with 25% tariffs on the first $250 billion of these Chinese exports zero inflation. What China will do and has done is simply bear the burden of these tariffs through lower prices for their products, fewer exports and lower profits. The Chinese government bears the burden through slower growth, and, in the meantime, this country is better off. So what you see is the Chinese, basically, absorbing that.
The other thing they do is manipulate their currency downward. For example, when we originally imposed the tariffs, we saw them drop their currency by almost 10%. So consumers don't have to worry. I think what I would like the...
GREENE: I just want to say, consumers don't have to worry? I mean, it's...
NAVARRO: That's correct. I am stating that...
GREENE: You can guarantee that if a family is going to buy toys for their kids, a new power tool, work on the house, they will absolutely not see higher prices? There's no chance of that?
NAVARRO: Mr. Greene, by the end of today, another 100 Americans or more will die from Chinese fentanyl. By the time the week ends, it's over a thousand. By the time the year ends, it's over 50,000. Fentanyl into this country is something that the Chinese president promised he would stop doing. There's other things.
Here's what I think we need to talk about in a bipartisan, nonpartisan way - the acts of aggression that China engages in, and then we have to decide what to do about it. First, uniformed soldiers of the Chinese Army regularly hack into our business computers. If you want to be a business and access the Chinese market, you're required to hand over your technology. We have hundreds of billions of dollars every year of intellectual property theft. China dumps products from steel and aluminum to cars into this country and puts - American factories closed and American workers out of work...
GREENE: Yeah, I don't think anyone disputes that a lot of...
NAVARRO: Hang on, this is important, Mr. Greene, because...
GREENE: Yeah, but I don't think anyone disputes China's behavior. I just want to ask you the direct impact of this. I mean, is your basic in argument...
NAVARRO: I've told you what the direct - is that what we've seen with the first $250 billion with the 25% tariffs - not 10, 25% tariffs - we've seen virtually no inflation, and China has absorbed these tariffs. They've borne the burden by lowering their prices and devaluing their currency and...
GREENE: But these are different goods, right? I mean, these are different goods. You have the Retail Industry Leaders Association - that represents Walmart, Target, Home Depot...
NAVARRO: Sure.
GREENE: ...You know, stores that a lot of American families go to to shop - saying that prices will go up. And I guess I just am - I'm asking - you know, you might be able to talk about the behavior of China and how important it is to try and change that. I'm wondering if the message to Americans is you might have higher prices if you go to shop at Home Depot, but we as an administration are going to make the case that it's worth it. I mean, can you be...
NAVARRO: I can make that case, but what I'm also telling you is that a 10% tariff will mostly be borne by China in the form of them lowering their prices and devaluing their currency. That's what they did with the first 250 billion, but you make a good point. You make the point for me, I guess. What are we to do here as a country when China cheats, steals, and takes our technology which is the seed corn for the future?
And I would point out here that one of the first people to endorse this latest move by the president was Chuck Schumer, a Democrat, a senator who we rarely agree with on a lot of issues. But I think what's important here for your listeners is to understand that we have a significant problem with China.
The president has been consistent about two things. One, his door is always open to negotiate in good faith. And two, if the Chinese don't fulfill their commitments and don't negotiate in good faith, he will take action. And that's what this president does, and he ran on that. He promised that. And what he's trying to do is restore the manufacturing base of this country through Ohio, Michigan, Wisconsin, Indiana, which have borne the burden of it.
GREENE: Peter Navarro is assistant to the president and director of the Office of Trade and Manufacturing Policy at the White House. Thanks so much.
NAVARRO: Mr. Greene, thank you, sir. Transcript provided by NPR, Copyright NPR.