Wall St bankers, hedge funds urged to stay out of China trade talks

Gulf Times Business - - BUSINESS -

White House trade ad­viser Peter Navarro warned Wall Street bankers and hedge­fund man­agers to back down from their push for Pres­i­dent Donald Trump to strike a quick trade deal with China’s Xi Jin­ping.

“As part of a Chi­nese govern­ment in­flu­ence op­er­a­tion, th­ese glob­al­ist bil­lion­aires are putting a full-court press on the White House in ad­vance of the G20 in Ar­gentina,” Navarro said in a speech at the Cen­ter for Strate­gic and In­ter­na­tional Stud­ies in Wash­ing­ton on Fri­day.

Their mis­sion is to “pressure this pres­i­dent into some kind of deal” but in­stead they’re weak­en­ing his ne­go­ti­at­ing po­si­tion and “no good can come of this.”

Navarro said in­vestors should be re- di­rect­ing their “bil­lions” of dol­lars into help­ing re­build ar­eas hit by man­u­fac­tur­ing job losses. “Wall Street, get out of those ne­go­ti­a­tions,” Navarro said.

“Bring your Gold­man Sachs money to Day­ton, Ohio, and in­vest in Ameri- ca.” Navarro didn’t of­fer de­tails on how Wall Street bankers or in­vestors are pres­sur­ing the White House.

But his com­ments came two days af­ter for­mer Gold­man Sachs Group Inc pres­i­dent and ex-Trump eco­nomic ad­viser Gary Cohn took a thinly veiled shot at Navarro, say­ing Trump had found “one econ­o­mist on Ama­zon who thinks trade deficits mat­ter, and he lis­tens to him.”

US stock mar­kets con­tin­ued their de­cline on Fri­day fol­low­ing Navarro’s com­ments on trade talks, which added to the gloomy out­look cre­ated by dis­ap­point­ing earn­ings in the tech­nol­ogy sec­tor and con­cerns about a bear mar­ket in oil prices.

Cohn – along with Trea­sury Sec­re­tary Steven Mnuchin, an­other for­mer Gold­man Sachs ex­ec­u­tive – have di­verged on trade pol­icy from Navarro and ex-White House strate­gist Steve Ban­non, who advocate a more con­fronta­tional pol­icy ap­proach to­wards China.

Henry Paul­son, the for­mer Trea­sury sec­re­tary and head of Gold­man Sachs, this week also warned that the ris­ing ten­sions be­tween the US and China risked creat­ing a new “eco­nomic Iron Cur­tain” in the world.

He said he him­self was try­ing to help ne­go­ti­ate a de­tente. “I am an Amer­i­can patriot.

And so I find my­self spend­ing more time in China than my fam­ily would like pre­cisely be­cause it is in Amer­ica’s in­ter­est to find a way to deal with this new, and some­times dif­fi­cult, China,” Paul­son told Bloomberg’s New Econ­omy Fo­rum in Sin­ga­pore.

Trump is ex­pected to dis­cuss trade with Xi when they meet at the Group of 20 sum­mit taking place November 30-December 1 in Buenos Aires.

While Trump has asked cabi­net of­fi­cials to out­line the terms of a pos­si­ble deal with Xi, Chi­nese of­fi­cials have given no in­di­ca­tion they’re ready to meet key US de­mands, such as halt­ing forced tech­nol­ogy trans­fers or rolling back sup­port for state-owned en­ter­prises.

Navarro said sim­ply buy­ing more Amer­i­can soy­beans and coal won’t sat­isfy the Trump ad­min­is­tra­tion, which wants deeper “struc­tural change” in the Chi­nese econ­omy.

He said trust in the Asian na­tion has de­te­ri­o­rated, with the White House doubt­ing the abil­ity of Bei­jing to fol­low through on its prom­ises.

“How do you have a deal with some- body if they don’t even ac­knowl­edge your con­cern? It’s Alice in Won­der­land,” Navarro said.

On Mon­day be­fore con­gres­sional midterm elec­tions, Trump told a cam­paign rally in Fort Wayne, In­di­ana, that he still be­lieved he and Xi could set­tle the dis­pute.

Ear­lier this week, Chi­nese Vice Pres­i­dent Wang Qis­han said China re­mained ready to dis­cuss so­lu­tions to the trade war, though he added that Bei­jing wouldn’t be “bul­lied and op­pressed by im­pe­ri­al­ist pow­ers.”

Christo­pher John­son, a China ex­pert at CSIS, said Navarro’s com­ments ap­peared to re­flect an in­ten­si­fy­ing in­ter­nal de­bate within the Trump ad­min­is­tra­tion ahead of the G20 meet­ing with Xi.

Trump had sig­nalled a num­ber of times that he is ea­ger to make a deal and yet hawks within the ad­min­is­tra­tion re­main skep­ti­cal that the time is right for one and worry any cease­fire would lack the proper sub­stance.

“At some level I in­ter­pret Navarro’s com­ments here to­day as re­flect­ing the con­cerns that some peo­ple have about the po­ten­tial for a bad deal,” John­son said, say­ing Navarro ap­peared to be try­ing “to cre­ate a fire­break.”

Traders work on the floor of the New York Stock Ex­change (file). US stocks con­tin­ued their de­cline on Fri­day fol­low­ing White House trade ad­viser Peter Navarro’s com­ments, which added to the gloomy out­look cre­ated by dis­ap­point­ing earn­ings in the tech­nol­ogy sec­tor and con­cerns about a bear mar­ket in oil prices.

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