Trump picks 'Death by China' author for trade advisory role

[December 22, 2016]  By Eric Beech

(Reuters) - U.S. President-elect Donald Trump named Peter Navarro, an economist who has urged a hard line on trade with China, to head a newly formed White House National Trade Council, the transition team said on Wednesday.

Navarro is an academic and one-time investment adviser who has authored a number of popular books and made a film describing China's threat to the U.S. economy as well as Beijing's desire to become the dominant economic and military power in Asia.

Trump's team praised Navarro in a statement as a "visionary" economist who would "develop trade policies that shrink our trade deficit, expand our growth, and help stop the exodus of jobs from our shores."

Trump, a Republican, made trade a centerpiece of his presidential campaign and railed against what he said were bad deals the United States had made with other countries. He has threatened to hit Mexico and China with high tariffs once he takes office on Jan. 20.

Navarro, 67, is a professor at University of California, Irvine, and advised Trump during the campaign. His books include "Death by China: How America Lost its Manufacturing Base," which was made into a documentary film.

As well as describing what he sees as America's losing economic war with China, Navarro has highlighted concerns over environmental issues related to Chinese imports and the theft of U.S. intellectual property.

China is paying close attention to Trump's transition team and the possible direction of policy, a spokeswoman for the Ministry of Foreign Affairs said after being asked about Navarro's appointment.

"Cooperation is the only correct choice. We hope the U.S. works hard with China to maintain the healthy, stable development of ties, including business and trade ties," the spokeswoman, Hua Chunying, told a daily press briefing.

While Trump in the statement praised the "clarity" of Navarro's arguments and the "thoroughness of his research," few other economists have endorsed Navarro's ideas.

Marcus Noland, an economist at the Peterson Institute for International Economics, likened a tax and trade paper authored by Navarro and Wilbur Ross, who has been named as Trump's commerce secretary, to "the type of magical thinking best reserved for fictional realities" for what he said was its flawed economic analysis.

'DON'T POKE THE PANDA'

Navarro has also suggested a stepped-up engagement with Taiwan, including assistance with a submarine development program.

He argued that Washington should stop referring to the "one China" policy, but stopped short of suggesting it should recognize Taipei, saying: "There is no need to unnecessarily poke the Panda."

China considers Taiwan a renegade province and has never renounced the use of force to bring it under its control.

U.S. Army Lieutenant General Michael Flynn looks at U.S. President-elect Donald Trump as he talks with the media at Mar-a-Lago estate where Trump attends meetings, in Palm Beach, Florida, U.S., December 21, 2016. REUTERS/Carlos Barria

China's foreign minister, Wang Yi, said in an interview carried on Thursday in the Communist Party of China's official newspaper that China-U.S. relations face new uncertainties but with mutual respect for core interests they will remain stable.

"Only if China and the United States respect each other and give consideration to other's core interests and key concerns can there be long-term, stable cooperation, and effect win-win mutual benefit," Wang said.

After his Nov. 8 election win, Trump stoked China's ire when he took a telephone call from Taiwan President Tsai Ing-wen in a break with decades of precedent that cast doubt on his incoming administration's commitment to Beijing's "one China" policy.

In an opinion piece in Foreign Policy magazine in November, Navarro and another Trump adviser, Alexander Gray, reiterated the president-elect's opposition to major trade deals, including the Trans-Pacific Partnership (TPP).

"Trump will never again sacrifice the U.S. economy on the altar of foreign policy by entering into bad trade deals like the North American Free Trade Agreement, allowing China into the World Trade Organization, and passing the proposed TPP," Navarro and Gray wrote.

"These deals only weaken our manufacturing base and ability to defend ourselves and our allies."

Trump has vowed to pull the United States out of the TPP, a free-trade pact aimed at linking a dozen Pacific Rim nations that President Barack Obama signed in February. It has not been ratified by the U.S. Senate.

The president-elect has also vowed to renegotiate the NAFTA pact with Canada and Mexico, saying it had cost American jobs.

(Reporting by Eric Beech in Washington; Additional reporting by Mohammad Zargham and David Chance in Washington and Ben Blanchard in Beijing; Editing by Doina Chiacu and Peter Cooney)

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