Trump pick for trade council stokes concerns about bilateral ties

US President-elect Donald Trump was known for talking tough about China on the campaign trail, such as slapping 45 percent punitive tariffs on Chinese exports and naming China a currency manipulator.

But he has named China friendly Iowa Governor Terry Branstad, an old friend of President Xi Jinping, to be his ambassador to Beijing.

His senior adviser James Woolsey mentioned Trump’s possible interest in joining the Asian Infrastructure Investment Bank (AIIB) and even the One Belt One Road initiative, things that President Barack Obama’s administration did not show interest in despite criticism.

However, Trump’s nomination last Wednesday of Peter Navarro to head the new White House National Trade Council should be a cause for concern.

Trump’s transition team said Navarro is a “visionary economist and will develop trade policies that shrink our trade deficit, expand our growth and help stop the exodus of jobs from our shores”.

While it is still unclear what his relationship with the still-to-be-announced US trade representative will be, and with Wilbur Ross, the nominee for commerce secretary, a sensible businessman I interviewed and chatted with in New York years ago said Navarro is known as a big-time China hawk.

In August 2012, I criticized a documentary based on the 2011 book Death by China by Navarro and Greg Autry and called it “hate speech about China”.

I described his key points: China is bad in every respect. China is stealing American jobs, killing its babies with unsafe toys and its army is preparing to kill Americans.

In a country known for producing great movies, garbage such as Death by China, like Nazi propaganda from World War II, shouldn’t even make it to the screen, I declared at the time.

The China-bashing by the conservative professor at the University of California-Irvine also includes his other books, such as The Coming China Wars (2008) and Crouching Tiger: What China’ s Militarism Means for the World (2015).

Readers who glimpsed the reviews on amazon.com will find that The Coming China Wars has been described as “China-bashing at its worst” and “meant to terrify you” and “simplistic and exaggerating”.

Crouching Tiger also portrays China as a military threat to the US in a biased and sensational way.

In a word, Navarro is hardly a visionary to me as the Trump team has described. He is clearly deaf and blind to the enormous win-win cooperation and potential of China-US relations, whether in trade and investment or in tackling regional and global challenges.

Trade is a form of cooperation, and the $550 billion worth of annual bilateral trade in 2015 has brought huge benefits to the people of both nations. But what Navarro and Trump have in common is to demonize trade, and especially the US trade deficit with China.

Such a feeling that the US trade deficit with China is in China’s favor is both politicized and misleading.

For example, each iPhone that Apple sells in the US adds some $200 to the US-China trade deficit. This means that iPhone alone would add $6 billion to $8 billion to the bilateral trade deficit each year. That is, of course, ridiculous because China only makes less than $10 from each iPhone, according to various economists.

There is no doubt that China has been taken advantage of in such a relationship.

If the US lifts its outdated restrictions on high-tech exports to China, an export regime built in Cold War years, the bilateral trade deficits will shrink dramatically or even be reversed.

Writing last week in the Project Syndicate, Cornell University professor Eswar Prasad, an economist and currency expert, blasted Trump’s accusation that China manipulates its currency as not supported by facts, and he described Trump’s “getting tough” on China as a move that will hurt both economies.

Many scholars have warned about a devastating effect to the US, China and the world brought about by a possible trade war if Trump truly puts his tough words into action.

To many, Navarro’s appointment only adds to such concerns.