No details about the plan, which could potentially spark a global trade war, have been disclosed ahead of the announcement expected Wednesday — referred to as “liberation day” by the president and his team.
The US has already implemented tariffs on all goods from China, Mexico, and Canada. A 25% tariff on all imported cars is also poised to go into effect this week.
Navarro, 75, is the president’s chief trade and manufacturing adviser in the West Wing. The Harvard-trained economist also served as trade adviser during Trump’s first term.
“The message is that tariffs are tax cuts, tariffs are jobs, tariffs are national security,” Navarro told Fox News Sunday. “Tariffs are great for America. They will make America great again.”
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Navarro insists that the revenue generated from tariffs will be so substantial that it will enable Trump to implement significant tax cuts, effectively offsetting the higher prices Americans would face.
“In the new tax bill that has to pass (…) we’re gonna provide tax benefits, tax credits, to people who buy American cars.”
Shifting the American economy
Navarro has also supported Trump’s controversial plan to create a new agency that collects tariff income — the “External Revenue Service”.
Trump and his advisers have claimed that revenue generated from tariffs could replace the income tax as the main source of revenue for the United States.
Economists and lawmakers, including Republicans, have noted it is highly unlikely that Trump’s plan could generate enough revenue from tariffs to replace the century-old federal income tax system.
Nonetheless, these policies only intensified the trade war with China, prompting Beijing to retaliate with tariffs on US goods and other measures, such as boycotting US soybeans.
Trump with president Xi Jinping in June 2019 (Photo: Kevin Lamarque/Reuters)
Navarro’s travels in Asia during the early days of his career convinced him that China was pursuing predatory economic tactics, which ultimately prompted him to publish a series of strongly critical writings about the country.
Once a Democrat, who ran unsuccessfully for mayor of San Diego, Navarro advised Trump during his first presidential campaign. Trump reportedly often referred to him as “my tough guy on China,” because of his determination to secure economic concessions from Beijing.
Navarro’s stint in prison
Navarro made history last year, when he became the first former White House official to be imprisoned for a contempt of Congress conviction.
While Navarro was serving time in prison, Trump was facing the possibility of criminal consequences for the various alleged offenses he had been accused of committing.
Unpredictability can backfire
As no one outside Trump’s cabinet knows what the reciprocal tariffs would entail before the official announcement, analysts warn that the unpredictability could backfire.
“Trust in Trump,” Navarro told Fox News Sunday.
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