1 big thing: Peter Navarro's secret past... as a globalist
I've got a quiz for you: Who wrote these passages?
- "The clear danger of this trend [protectionism] is an all-out global trade war; for when one country excludes others from its markets, the other countries inevitably retaliate with their own trade barriers. And as history has painfully taught, once protectionist wars begin, the likely result is a deadly and well-nigh unstoppable downward spiral by the entire world economy."
- "On the benefit side, protectionism within certain basic industries like autos, steel, and electronics helps to create and sustain an industrial base that, in times of war or national peril, can be shifted to defense purposes. However, this national security argument — and the existence of any benefits resulting from protecting these industries — can be legitimately called into question for several reasons."
If you answered with any of the following "globalists" — (a). Gary Cohn, (b). Larry Summers, (c). George W. Bush, or (d). Paul Ryan — you'd be wrong.
The correct answer is (e.) Peter Navarro. Yes, that Peter Navarro. The Peter Navarro who has become the Trump administration's hardest-line protectionist and proponent of massive tariffs against the rest of the world — using the very national security justification he undercuts above.
The reason you've never read about this globalist, free-trader version of Peter Navarro, is because the book these quotes come from is long out of print. We got a tip about Navarro's 1984 book, "The Policy Game," and Axios' Erica Pandey found a copy of it in the George Washington University library.
- Pandey says it was a weird experience reading the book because the arguments Navarro lays out are the very arguments his opponents — Steven Mnuchin, Gary Cohn, Rob Porter and Larry Kudlow among them — have been using in sometimes heated internal arguments against him.
Before we published this story, Pandey shared these passages with Navarro and asked him why he changed his views so radically, given the underlying economics have not changed since he, as a 35 year-old, wrote the book.
The bottom line: The rise of China — and the country's extraordinary trade abuses — and the implementation of NAFTA profoundly changed Navarro's views, he says.
- "It borders on the comical that Axios would spend so much time on a book written 34 years ago and completely ignore the insights of my later works like the 2006 Coming China Wars, the 2011 Death By China, and the 2015 Crouching Tiger," Navarro said.
- "Together, these books explain at length why the globalist Ricardian free trade model is broken and urgently needs fixing in the name of both the economic and national security of the United States."
Navarro gave us a much lengthier explanation of his evolution. There's no room for it in this newsletter item, but I wanted to give it the space it deserves. So here's Navarro in his own words, explaining how he transformed from an unapologetic globalist into a hardcore economic nationalist.
Go deeper with Pandey's report on what Navarro used to believe.