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I always trust in the president.

He's playing three dimensional chess.

You can have points of view, you win some, you lose some, but I always trust his judgment.

Peter Navarro, economist, White House trade advisor, and the man who went to jail for President Trump.

Yes, indeed, this morning I did walk out of a federal prisident.

Who would you trust to continue this agenda?

You got jd Vance's the vice president and Marco Rubio.

That would be the great ticket.

From Bloomberg Weekend.

This is the Michelle Hussein Show.

I'm Michelle Hussein.

It's been a dramatic start to the new year for the Trump administration.

First the season of Venezuela's leader, Nicholas Maduro and saying the US will be running that country at least for now, and then renewed talk of acquiring Greenland, which is part of Denmark, a NATO ally.

Given Greenland's minerals and Venezuela's oil, all of this is another demonstration of just how acutely aligned US trade policy and foreign policy now are.

But there's also a really important aspect to the trade story that is bubbling at home in the US, and it's part of this conversation with Peter Navarro, the man who has probably influenced Donald Trump on tariffs more than anyone else, a man who's been at his side for years.

Right now, the administration is waiting for the Supreme Court to have it say on the legal basis for last year's tariffs, and if the White House loses, the implications are considerable.

So keep that in mind as you listen.

Navara and I spoke in Washington before the Venezuela developments, but the way he sees the world is a crucial insight into how the Trump circle thinks and why Dr Navara welcome, Thanks for being with us.

Great to be with you.

I wondered if we could start with the origins of your bond with the President.

When did you meet him for the first time.

It goes back to two thousand and six, when I wrote the first book in what would be my China trilogy.

This is a book called The Coming China Wars, and at the time it was widely viewed as hyperbole.

Right now it reads like a government report basically based on my research.

I had parsed the Chinese economic model, the prevailing view in the early two thousand thousands, as China had joined the World Trade Organization it was beginning to inundate the world with their dump manufactured products.

Was that it was simply cheap labor.

And but my analysis showed that was a lot more than that.

Things I would eventually call the seven Deadly Mercantile of sins, which is to say that China said about taking the world apart using things like high government subsidies, intellectual property, theft, unfasting, piracy, the whole state owned enterprise, the whole gamut.

So I had spent several years doing research on that, published becoming China Wars.

And then in twenty eleven President Trump was doing an interview and they asked him what his favorite books on China were, and mine was on the top ten list.

So I sent him a note of thanks and we changed correspondences.

There'll be type letters, but he'll always put a handwritten note in it.

And that how that began.

And when he went down the escalator with Milania and declared, I sent him a note, say, hey, you need anything, and they called me.

In twenty sixteen, I was supposed to go out to New York just for a couple of days and I meet him there.

It was pretty funny.

I get into this black suv in the back seat, right, and we're getting ready to go to the airport and get in his plane to go to a rally, famous rallies.

And he gets in the front seat and he's going, Hey, Rupert, what's going on.

It's like he's stalking to Murdoch.

And then he hangs up and he looks at back and he goes, who's that because you never seen me before?

And I introduced myself and that's kind of how it happened.

So you bonded.

You bonded over China, essentially your views on China, and then China became a big rallying point for him in his first in his first run for the White House.

I want to understand something about how your views evolved because you used to be a Democrat, right, You used to talk about how bad protectionism would be not only for the US but the global economy.

Well, you're conflating a few things there, because historically Democrats were the ones who were protectionists, who were in favor of basically defending the American working class against unfair trade.

And we had in our history of this republic, a very long history of defending our manufacturing base.

If you go back to Alexander Hamilton, first Treasury secretary, he wrote a very stunning book about manufactur and the need to protect it.

Lincoln was a tariff man.

McKinley was a tariff man.

Henry Clay was a tariff man.

I mean, all of these famous figures, and up until nineteen thirteen, the United States actually funded its government entirely through tariff revenues, if you knew that.

And then we had passed the income tax and kind of shifted away from that.

And one of the running jokes the bosson I have is like, who figured the China thing out first?

And of course he did, because if you go back, there's a famous interview with him in Oprah Winfrey back in the eighties, and he wasn't talking about China, but he was talking about Japan and how they were taking us apart with unfair trade, and everything he said back then would then fit the China model.

Now, with respect to my evolution of thought, my first exposure to kind of the Chinese economic model was when I was in a peace corps in Thailand, and what was fascinating to me is that virtually everywhere you went in Asia, the commerce was run by Chinese.

Even then it's before time, before Gint's joined the Double Well, this.

Was the Chinese diaspora who had left because of miles, starvation and famine policies.

So you fast forward to I'm teaching at the University of California Ravion business students who are fully employed.

Right they come at night and on the weekends, and I'm noticing they're losing their jobs.

I'm thinking, what's going on here?

And this was circa two thousand and three, and curiously two years after China joined the World Trade Organization.

So I looked into this and it's like all roads led to Beijing.

I do the research project and I realized, hey, this this is cheating.

It's devastating our manufacturing base, and I would continue that research.

So bring us up to the present day.

Then, because you were at President Trumps side in the first term, you went to jail for him.

So to be clear, I went to prison in defense of the constitution, the constitutional separation of powers.

Basically, what Congress did in the wake of the January sixth riots on Capitol Hill was engaging a partisan effort to unseat the president and make sure he never ran for office again.

I wonder how much it changed you, because I'm struck reading your account of your prison days.

How much you notice and document all the small pettiness, really, the meanness that you see around you, the withholding of medicines, the lack of fresh fruit and vegetables.

Did you see a different America which has informed your politics?

Now?

I grew up poor, I grew up in that miliu.

It just in prison didn't change me at all.

I changed prison.

I changed that place.

I changed the system.

I went in there to defend the Constitution on principle, and instead of crying in my beer, I turned myself into an investigative reporter and covered a five billion dollar scandal.

And since I've been out, I've solved that scandal and that's a pretty good achievement.

So presently changed me?

I changed it.

And now you've been his trade counselor and advisor through this period.

How's the relationship between the US and China on trade going?

Now?

Help us understand it.

Look, it's a work in progress, the relationship with China.

I am a veteran of the first term.

I spent months and months and months with then the United States Trade Representative Robert Leitthheiser, one of the great American patriots and thinkers in this country, and we negotiated with the Chinese a very very comprehensive trade deal.

It was an amazing thing that would have been really good for China as well as the United States because it would have completely reform Chinese model, and they agreed to it, and then at the last minute, Chi Jinping said no, okay.

So that was that's like really important to understand.

We went for a long over a year negotiating what would have been a perfect deal, and then at the end they backed out of that.

And then we signed what was called the Skinny Deal, and that was in January of twenty twenty, the last year the Trump administration, and they.

Didn't abide by that.

So the problem that we always faced with China is that you always kind of wonder whether they're just stretching you out, whether even if you sign a deal, they're going to retrade it.

And the US administration, which is why I want to understand what the actions currently are.

For example, President Trump meets Siegen Ping and Essentially, you end up with a deal which lowers some tariffs and which suspends heightened tariffs.

So there's effectively a year long trade truce.

Is that keeping with your mission to avoid death by China?

So you're burying the lead here.

What's the current tariff rate now?

Well, the ones I'm referring to are the lowering.

Of some of the Well, what's the current rate after they've been lowered.

Well, it's ten percent on some things.

Right now, totally, total tariff on China is almost fifty percent.

Okay, let me say it one more time.

It's almost fifty percent.

So when you say that we lowered the rates, we only lowered them down to fortyk.

Imposed to fentanyl flows, and there was a suspension ciprocal tariffs.

You have to understand there was a baseline tariff because of the Section three oh one actions in the first term.

One of the few things Joe Biden kept that we added the reciprocal tariff to which is still in place, and a twenty percent fentanyl tariff, which we only lowered by ten percent.

So those are robust tariffs on China, and in fact, we are strongly encouraging Europe to adopt exactly the same level of tariffs that we adopt for the simple reason that when the President puts up tariffs to defend America from Chinese cheating, China can't sell as much here where does it sell it?

Dumps it in Europe, dumps it in Mexico.

Now as we are talking, just in the recent news, Mexico did exactly what I'm suggesting, did so at the urging of our trade team, which is to say, the Senate in Mexico passed fifty cars on China.

And they did it because China was dumping goods which would otherwise go in America.

And Europe should.

Follow the US and Mexican lead, and there are doing that.

They're doing that and steel, and I seeing that in other countries.

But I'm sure that you can see why.

Looking at the US China relationship, one can see the contrast between when President Trump first arrived and we end up with a meeting after which he talks about having enormous respect between the two countries and how honored he is that presidency has has authorized the purchase of soybeans and other goods.

So there is a softening.

No, there's no softening, understand trump diplomacy works.

And the great thing that people, particularly on the left oone understand is that it's functional for President Trump to have open lines with Shijin Ping, Vladimir Putin, to wand in Turkey, all of the people that the world regards as vicious dictators, which they are, but they are part of the world stage where you have to negotiate.

So we have them saying enormous respect for China.

That's what he's talking about.

Do you have enormous respect?

I have enormous respect for the Chinese people.

Okay, the Chinese people are under the boot of Chinese Communist Party.

If China is going to escape its own mercantilist economic model, which is screwing the world, including Europe, and causing tremendous instability in the financial system and great anger towards China, it needs to do one simple thing.

It needs to lower the savings rate in China by providing a social safety net for his people.

It's extraordinary that.

A communist social list country has no protections with respect to pensions or healthcare for its people.

That's extraordinary.

And instead, what the Chinese do, because that's the way they roll, is they let the Communist Party members become rich, they let a smaller slice of the entrepreneurial class become rich, and then everybody else is allowed by Jings.

I know how strongly you feel about this.

You've written about it in successive books.

I wonder if there are other people who would prioritize doing business with China who have influence over the president in a way that makes you less than comfortable.

Jensen Nibs managed to get Nvidia H two hundred chips being sold to China.

Are you comfortable with that.

That's a work in progress, that's an ongoing dialogue.

I think people have to understand that there's a constant negotiation going on with countries around the world.

I mean, and the China relationship is a very difficult one.

I think you left out the part about how China has weaponized rare earth critical minerals, which you're a critical part of virtually every high technology product that's made around the world.

And China has been flexing its muscles now in Europe and India and the United States saying basically, we're going to do what we want and if you try to stop us, we're going to take away your critical minerals because they have they think they have a monopoly on it.

But that's just a matter of time.

American innovation is going to quickly wipe away that weaponization.

So what do you do in the meantime?

You do diplomacy And if people want to call that soft, then they don't understand the chessboard.

So are you comfortable with China being able to buy in the videos the specific game?

But the next generation AI.

Ships not my wane?

Okay?

I accept it enables a lot of competition then with USAI companies.

Let me let your viewers know this.

I'm one of only.

Three people who served as a senior advisor in the first Trump administration from the beginning to the end.

That happened because I stay in my lane and ships are not my waye.

I know from one of your books, taking Back Trump's America, that you know exactly what it's like to be part of an administration where different people have influence, and how you worry about losing sight of a core agenda.

You write essentially that people need to remember about delivering for working class Americans.

So are there risks to the American people not understanding the agenda that you're trying to deliver now that we're in the run up to the midterms.

Of course, and part of my job is to explain exactly what we've inherited, which is a mess, how we're addressing it, and how long it's going to take to see the fruits of the Trump policies.

The model here, how long do you think it's going to do well?

The model here is the transition from Jimmy Carter in the seventies era of stagflation to the presidency of Ronald Reagan.

Carter, much like Biden Harris, created a tremendous problem with both inflation and recession because of their policies.

If you think about what Biden set us up for, it was a stagflationary scenario.

So Carter did the same for Reagan.

So Reagan comes in, does their deregulation, positive supply shock, does the tax cuts, positive supply shock, makes adjustments, stops doing stupid stuff like Carter did.

But it takes time, and for Reagan the time ran out because by the time the midterms rolled around two years after he assumed office, it was a bloodbath and the Democrats won the House and basically paralyzed government.

But the next six years were a beautiful thing because Reagan's policies took hold and we had one of the.

Most prosperous times.

Now we understand that history, and we're trying to make sure we don't get caught in that same vice.

So what we have to do is explain very clearly to American people.

Let me give you a two exam.

Wait, I do want to ask you this this point about the timeframe, so work in progress.

You need to convince Americans and work hard on that.

Twenty twenty eight in that election, who would you trust to continue this agenda.

It's not for me to say, and that's not that's not my job.

You got JD.

Vance's the vice president and Marco Rubio.

That would be, for example, a great ticket.

With who at the top of the ticket.

JD would be there, But Marco's already said that if JD.

Runs, he would wouldn't challenge you.

I love these guys, these are.

I always admired Marco back in twenty sixteen.

I always thought he was like of the people on that stage, the sixteen Republicans.

I always thought he was the sharpest tool in the shed besides Donald Trump.

Right, he couldn't hold a candle to Trump with respect to everything.

But he's he's he's really a very capable person.

But I think you're on some here with the messaging because people on your side of the Atlantic are You're going to be watching that election for Congress very carefully because what happened in twenty eighteen because we lost the House.

I write about that in my book.

There were some mistakes made that I hope we don't make again.

It became, let's say, a crap show.

That's a little easier way of saying it, because the Democrats just started issuing subpoenas and impeachments and all that.

But we don't want to repeat that.

But here's what we're up against.

It's like, we come in and we got egg prices off the charts, and we got beef prices off the charts.

Okay, it's like that's terrible.

It's like it's as American as you can't scramble eggs and hamburgers, right, So with eggs, we've been able to dramatically reduce the price of eggs almost immediately.

How did we get there?

This is really interesting how politics works here.

It's like the Democrats come in and the chickens.

They kill eighty million chickens.

Literally, Joe Biden slaughters eighty million chickens because he overreacts to an avian flu thing.

At the same time, with beef, he reduces grazing land because they're like, they want to eat soy birders.

And questions about your policy, aren't they?

You mentioned beef, And I'm conscious of the fact that President Trump reduced tariffs on beef, tomatoes, coffee, and bananas exactly because of the pressures on the household budgets of ordinary Americans.

So that's an acknowledgment, isn't it that some of the actions the administration has taken, including on tariffs of which you are the architect, they have played a role in hurting ordinary Americans.

I'm totally supportive of no tariffs on products we don't make here.

We don't make coffee here, so it made no sense.

It happened, and now we make adjustments.

That's what we do.

We may adjustments, but if you look at the economics of that or elasticities of supplying the man, it's like, we don't make coffee, right, so we don't make chocolate, so we lower the price on that.

In the short run, we can we can import a little little beef.

But we just had oil drop below sixty dollars a barrel, which is where it was when we left office the first term for Trump.

Okay, Biden jacked that price up is about seventy five dollars.

And so what that does is not only increases the cost of heating your home and driving your car.

It increases the cost of fertilizer for crops, so food prices go up.

It increases the cost of transportation for more.

Manufacturing jobs have declined for seven straight months.

Let's shift to that.

Let's think about that.

Okay, that's my job.

I'm the senior counselor for trade man.

Actually, how long do you think it's me?

I can tell you.

I can tell you that with exactitude.

Okay, here's how it works.

No, how long is it going to take for you to be well?

Let me let me just work you through the quick math.

For you to have a new factory in this country ready to produce things and therefore have new manufacturing jobs, that's about two to three years.

Now.

What you see in the interim is this, We're having literally trillions of dollars of investment come in from abroad as well as domestically, which is, as we speak, beginning to design those factories and get ready to build them.

Now what happens then you have a boom in construction jobs.

That's the first phase of that.

But you won't see any improvement in manufacturing right then.

But then once you build the factories, that's when you see the manufacturing jobs.

So home wasn't built in the day China took us to It's going on twenty five years now.

Where they've taken us apart.

It's not just the factories they took.

They took our supply chains.

And we can't like wave a magic wine, doesn't work like that.

But if you simply.

Look at the trajectory, it's going to be a beautiful thing.

Do you think it's going to be enough of a message to be saying to Americans in the run up to the midterm it's a work in progress.

The Democrats left us a really bad inheritance.

Don't you think you might have to do more?

We are doing more.

I can't I'm going to assure you.

Let me give you one book preaching.

What about what about increasing taxes on the wealthiest, like a forty percent tax, Right, that's something Steve Bannon, who you know well, is in favor of.

Would you support it?

I supported that back in the first terms.

It's a debatable issue, but look, I always trust in the president and he's playing three dimensional chess and I it's like, you can have points of view, you win some, you lose some, but I always trust his judgment.

Now, what you pulling that kind of out of left field?

I think the thing that we have to do here in terms of the midterms is, first of all, explain to people exactly what we're doing across the different areas where we have problems with inflation, which is the housing, the healthcare costs, food energy, Those are the biggies, and we are as we speak, working twenty four hours a day on things we can do to make that better.

You've got the Supreme Court case verdict coming up since which a lot of people are preparing for it to go against the government based on the comments that the Justice is, including John Roberts May during questioning what happens if the government loses the case?

What does the plan be.

Let's start with the case itself.

The case is about whether you can use the emergency powers of the president to impose.

Terrors, and it was your advice that he could.

You you were clear that this was the way the i e e p A, this was the activity.

If the Supreme Court wants to essentially ratify the president's use of terroiffs under i EPA, the law is on its side and our side, and the law is simply this.

There's two salient points for your viewers.

One is the question of whether a tariff is a tax, and in this context, in an emergency context, it's absolutely not.

Os revenues are incidental.

Now.

The other, the other issue is a language.

Issue, is whether terriffs are legitimate form of import restraint, and of course they are.

So the Supreme Court has has the ability now with respect to Plan B.

Whatever Plan B is will not be as good as Plan A.

So we have to recognize that this will be ex.

Because doctor lots of companies will have to be compensated, won't they For time.

Depends on what the discision.

Let's not go there until we have to go there.

I mean, I'm very confident that we have a very very good chance.

I mean, the laws on our side, the laws on our side here, So let's win that.

Now, if we don't win, there's the whole alphabet number soup of things we've got.

We've got the Section two thirty two's which which we are using aggressively already on things like steel and aluminum, on lumber, on critical minerals and pharmaceuticals.

We have that.

We have the three oh one section, which we used on China to impose tariffs, which we can.

Do on any country in the world.

It's cheating us.

It is wrong.

If this case goes against you, it will affect your standing, won't it in the White House?

Because you were the one who was convinced that this route was the right one to go down with the bulk of tariff policy.

Would you consider resigning if the case is lost?

Of course, that's silly, I mean, and why I just like, I'm part of a trade team.

We've got Scott Bessett as the Treasury Secretary, Howard Luttnik is the Commerce Secretary, Jamis Career as the United States Trade Representative, and myself with jd Vance Wayne In and the only person who matters as President Trump.

Okay, so we.

Are proceeding as the vision of how to go about this was crafted not by me, but by a group of people.

We're doing exactly what we should be doing.

We've anticipated contingencies, but we think that the most important thing to do now is focus on winning that case of the Supreme Court.

That's where we're at.

If we lose, then we have a plan B.

It's not for me to talk about that to the world because I don't think we're going to lose, but if we do, we are certainly prepared.

Imagine the refund bill, which Thomas saying could be as much as one hundred billion dollars.

I think you're basically making the case why what we've done is a very good thing.

I mean, think about it.

We inherited from the Democrats who spent money, as we say, on this side of the pond, like drunken sailors.

Okay, just totally fiscally irresponsibile, like crazy stuff.

And we were looking when we got into office at a fiscal cliff that was going to crush us with higher interest rates, inability to financy it, and and this tariff revenue, if you just cost it out, is the difference between a day injurious deficit and a healthy pay down in our debt.

We're coming towards towards the end of the conversation.

And I quite often ask people what they do at the weekends, and I'm conscious, like, what are your weekends like work?

When you look, it's like when you're working for the White House, it's like being at sea or being on deployment for the military.

You're working every day.

And I know better than most because I remember the last day from the first term and it was like, you know, you're living in Wow.

There was some stuff we.

Left on the table we could have should have got done, and we didn't.

And I try to tell people who there, it's like, look, the clock's ticking and we got a lot of work to do for the American people.

Spend as much time as you can without it influencing or harming your family time.

But this job is not a job.

It's not a job.

It's a mission.

I mean, there's no I mean, it's like, if this were just a job.

I wouldn't be doing it because I'm I'm at the retirement age and I could just as easily be working on my next book or whatever.

But the White House team are in glossy photo shoots.

It's for Vanity Fair.

You know that funny you mentioned that.

Go to that Vanity Fair article and look at everybody they took a picture of, and every one of those persons and pictures looks demonic, demonic in those pictures.

They frame those pictures in a way to have you hate those people, and that's despicable.

That Vanity Fair thing is a very sophisticated form of propaganda.

It's basically the triumph of fear over fact.

And the guy who wrote it, Chris Whipple, Shame on him.

He was once a fairly good offe.

He's turned into a Trump arrangement syndrome guy.

And it's just quotes are on the record and they're all on it.

Well, I would challenge that as well.

Just go look at those pictures.

I mean, Caroline Leavitt, the way they did, it's like they went in and airbrushed that thing in a way, which I mean, it's just it's brutal what they do.

Is that really what you're taking away from what I was putting to you is that they're taking the time to be in a vanity photo shoot.

You're talking about mission and you weren't in that photo.

No, no, no, no, no, no, no, no.

Like every one of those people in that article works twice as much as anybody you know.

Okay, they're they're working NonStop and the pressure is hard.

I mean, stuff happens like on any given day.

Stuff happens that you got to figure out.

You got to be quick on your feet, you got to be able to do the right thing.

And I'm just saying that that Vanity Fair article, it's just a study in propaganda.

Betanavarro, thank you very much for talking to us.

A pleasure.

That's the Michelle Hussein Show for this week.

You'll find our email in the show notes, so please do write to us or leave us a comment, and don't forget.

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Until next time, goodbye,