“China has strategically gained the tariffs by slashing their prices and by devaluing their currency,” Navarro told “Fox News Sunday.” “Since the tariffs were put in place back in 2018, the Chinese yuan fell by almost 10 percent, so they have offset virtually all these tariffs and the consumers are not seeing any price hikes in any significant way … We could have a bigger question about whether tariffs, in general, might cause rising consumer prices, but not in this case.”
As trade talks with China continue, President Trump announced August 1 that the U.S. would impose another 10 percent tariff on $300 billion worth of Chinese goods, beginning Sept. 1, noting in a tweet that Beijing failed to fulfill its promise to buy agricultural products from the U.S. in “large quantities.” Trump added that Chinese President Xi Jinping said he would stop the sale of fentanyl – a type of opioid – to the U.S., but failed to do so.
“Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country,” Trump tweeted. “This does not include the 250 Billion Dollars already Tariffed at 25%.”
While Navarro said the administration is not seeing the resulting impact from China tariffs show in the data, other groups disagree. The Consumer Technology Association previously noted that an increase in tariffs on Chinese goods means prices for laptops, tablets and smartphones would rise. The Tax Foundation said the latest round of tariffs will cost a typical family of four $350 a year in addition to $850 from the current tariffs on China.
The Federal Reserve, meanwhile, announced last week it was cutting the key interest rate for the first time in more than a decade. The central bank cited “implications of global developments for the economic outlook as well as muted inflation pressures” among the reasons for its decision to lower rates by a quarter-point.
“We also feel like weak global growth and trade tensions are having an effect on the U.S. economy,” Federal Reserve Chairman Jerome Powell said at a press conference last week. “You see it now, in the second quarter – you see weak investment; you see weak manufacturing.”
However, the Trump trade adviser slammed Powell and blamed the Fed chair for hurting U.S. economic growth.
“Jay Powell is singularly responsible for losing at least a point of growth on GDP by raising interest rates by 100 basis points and engaging in what’s called quantitative tightening,” Navarro said, adding that the central bank is the “single greatest obstacle right now to strong growth in America.”
In order for the U.S. to eliminate the tariffs on China, Navarro said Beijing must end the “seven deadly sins.”
“It’s: Stop stealing our intellectual property, stop forcing technology transfers, stop hacking our computers and steal our trade secrets, stop dumping into our markets and putting our companies out of business, stop their state-owned enterprises from heavy subsidies, stop the fentanyl, stop the currency manipulation. These are all structural changes.”