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‘It’s Over’: Peter Navarro Declares China Trade Deal Dead, Immediately Backtracks

"They sent hundreds of thousands of people to this country to spread that virus".

“It’s over”.

That’s what Peter Navarro told Fox’s Martha MacCallum about the US-China trade deal in an interview late Monday. Risk assets shuddered across the globe.

“They came here on January 15th to sign that trade deal, and that was a full two months after they knew the virus was out and about”, Navarro said, calling that “the turning point”.


“It was a time when they had already sent hundreds of thousands of people to this country to spread that virus, and it was just minutes after wheels up when that plane took off that we began to hear about this pandemic”, Navarro went on to tell Fox.

The network notes that Navarro also “compared China’s actions to the Japanese government in late 1941, weeks before the attack on Pearl Harbor”.

Perhaps seeing the damage he had done across assets Navarro quickly backtracked, likely after a call from an irritated president.

The comment was not about the “phase one” deal, he said. It remains in place. Instead, Peter claimed he was speaking generally about the lack of trust the US has in China.

Just minutes after Fox ran the interview, Navarro said his comments were “taken wildly out of context”.

Peter has repeatedly suggested that officials in Beijing lied about the origins of COVID-19, and that the administration is becoming more confident in the notion that the virus escaped from The Wuhan Institute of Virology.

Navarro’s extraordinarily inflammatory claims came just 36 hours (give or take) after similarly abrasive comments to CNN.

Over the weekend, during an interview with Jake Tapper, Navarro called the virus “a product of the Chinese Communist Party”.

Pressed on whether he meant to say that COVID-19 is a bioweapon (i.e., a man-made construct), Navarro did not rule it out.

“Did I hear you say China created this virus? Did I hear you wrong?”, Tapper wondered.

“You did not hear me wrong”, Navarro said.

“But you think it was purposely created?”, Tapper asked, directly.

“That is an open question”, Navarro retorted.

The previous evening, during his rally in Tulsa, Trump called COVID-19 the “Kung Flu”, a racist remark that did not go over well with at least one state-owned Chinese media outlet. On Monday, the US designated four Chinese media organizations as foreign diplomatic missions. Going forward, China Central Television, China News Service, People’s Daily and the Global Times will need to detail their US staffing and their US real estate holdings to the State department.

“These entities are not independent news organizations; they are effectively controlled by the Chinese Communist Party”, assistant secretary for east Asia and Pacific affairs David Stilwell said.

There is, as of now, no evidence for the claim that COVID-19 was the product of a Chinese bioweapons program, but Navarro is not the first Trump official to obfuscate when asked the question.

During a controversial interview with ABC early in May, Mike Pompeo appeared reluctant to say, definitively, that the administration has ruled out a scenario where Trump will accuse China of creating the virus and then deliberately unleashing it on the rest of the world.

Also last month, Navarro accused Beijing of “seeding” major metropolitans areas around the globe using airline passengers as hosts.

On the trade deal, nobody believed it was possible for China to live up to its commitments. I’ve obviously spent quite a bit of time in these pages over the past two weeks explaining why it seems far-fetched to believe that Beijing will be able to honor its end of the bargain.

But a new wrinkle emerged with John Bolton’s claim that, during a conversation with Xi at the G-20 meeting in Osaka a year ago this month, Trump directly linked Chinese purchases of US farm goods to the 2020 election.

Trump denies the claim.

Two days after Bolton’s accusations (as detailed in excerpts from his memoir) made the front page of major news outlets, reports indicated that China was ramping up purchases of agricultural products in a mad dash to at least make good on that part of the agreement.

Somehow, China is expected to bridge the gap between the blue and orange bars in the figure by December.

Beijing is just 13% of the way to meeting its commitments for 2020 on farm purchases. Currently, orders are running 40% below the pace from 2017, which is the base year for the agreement.

Through it all, Trump administration officials have remained optimistic in public about the trade deal, insisting that it can be kept separate from the myriad punitive legislation on Capitol Hill aimed at punishing China for a laundry list of grievances including the virus.

On Friday, during an interview with Axios, Trump said he ‘s held off on sanctions against the Chinese for human rights abuses in the interest of keeping the trade deal in play. Last Wednesday, he finally signed bipartisan legislation green-lighting sanctions, although it remains to be seen what the next steps are.

As of late last week, Pompeo was still tweeting that the Chinese intended to honor the trade deal.

But experts and analysts have been warning for months that the agreement was never realistic in the first place. I think it’s entirely fair to say that most observers believe the pandemic was the nail in the coffin for the agreement.

Needless to say, Navarro’s bombast should be taken with a grain (and perhaps a whole shaker) of salt, and there are any number of instances where Peter has been sidelined by Trump over the course of the trade war for speaking out of turn and otherwise being impossible to deal with. His pseudo-apology on Monday night is a testament to that dynamic.

For now, we’re supposed to believe the latest jabs from Navarro are little more than throwaway soundbites that shouldn’t be taken literally, especially in light of contradictory remarks from higher-ranking officials, including Pompeo and Bob Lighthizer.

Still, this serves as an unwelcome reminder that we’re always just one irritated Trump tariff tweet away from the kind of macro “shock” catalyst that could pull the rug from beneath the market.

Read more:

‘Long Way To Go, Short Time To Get There’ – China Will Attempt The Impossible With Farm Purchases

Trump To Axios: I Haven’t Sanctioned China For Human Rights Abuses Because Of The Trade Deal

‘It’s Toast’: China Trade Deal Seen Dead Amid Hong Kong Melee. Uighur Bill Goes To Trump’s Desk

9 comments on “‘It’s Over’: Peter Navarro Declares China Trade Deal Dead, Immediately Backtracks

  1. joesailboat says:

    The President misspoke about Venezuela. So much misspeaking going on with this Organization. Does not sound very organized.

  2. runamok says:

    One marker of my age is that I remember the time when the US had a diplomatic corps.

    So much of this economic pain (and wretched incompetence) was brought upon us by ourselves.

  3. I still find it fascinating and surprising that the Chinese are going along with the charade, they could deliver Trump a letal wound simply by acknowledging what everyone suspects, that phase 1 is simply a fantasy useful only to Trump’s re-election narrative. The fact China keeps taking punches without punching back (other than harmless twitter slaps) leads me to believe their calculations indicate they can gain more from humoring Trump, at least for the time being.

    • dayjob says:

      Yeah, on the face of it, it may seem surprising given Trump’s antagonism toward China, but looking at the situation, Xi has already seen how easy it is to bend Trump to his will if Bolton is to be believed (and I do believe it). Countering China’s moves requires coalition building and long-term planning which are two of Trump’s greatest shortcomings. In the meantime, US consumers will continue to pay the cost of the tariffs and farmers will be lucky to sell a few extra tons of soybeans and corn.

      I would love to be a fly on the wall when foreign leaders discuss Trump. I’m guessing they are as incredulous as many of us, but they are laughing all the way to the bank while we stand agape as Trump’s raucous supporters go wild over him drinking a glass of water.

  4. jyl says:

    Why would China want to deliver a lethal wound to Trump? He’s the best US President for them.

    He’s deeply destructive to the US both domestically and abroad. Your biggest adversary gets weaker and more distant from its allies every day.

    His trade war is irritating but now unimportant relative to the pandemic effects, he’s so transactional that China can probably blunt anything really painful, and after he’s reelected who’s to say he’ll continue it?

    He’s ultimately too weak to seriously challenge you over Hong Kong, the South China Sea or Taiwan.

    You and Putin agree. Support Trump.

    • John3D says:

      Underestimating the Chinese is a big mistake. If you are going to take them on you need your A game. On second thought make that your A+ game.

  5. D Price says:

    Misspeaking is used by this administration as a means to soften the blows of upcoming announcements. Many times the actual announcement is the original statement. However the negative reaction has already been teased and at times the markets have just yawned once the policy is announced. Would be an interesting study to link the times statements have been rolled back just to see in a few weeks the original statement generally reflects the policy. It is a process that normalizes extremes.

    • joesailboat says:

      Thank you. Your point is well taken. The question still remains how much is intentional. I do understand that it can be used in such a way politically to gauge a reaction. Navarro is very emotional on the subject and he has been their pit-bull. I assume the President has sold dwellings to Venezuelans and should know what kind of response he would receive in Florida. Back and forth on testing. It seems everyday is retraction, un-retract day. If this is mostly organized it makes them sound disorganized and at this juncture in events seems would put off voters. Potus did mention during the last debates that he wanted to keep foreign leaders guessing. Is the U.S. electorate also an adversary? Time will tell.

  6. One problem the American democratic system has is being able to plan in terms of decades when you may get an idiot elected in the next election and the train not only gets derailed it goes off the bridge. The Chinese and Russians don’t have this problem. This is why it is so important to be able to formulate as part of a group so that the primary thrust is not lost during changes of leadership of individual members. It may take three or four more years to fully realize what we’ve lost during the Trump/McConnell leadership debacle and it may take another three or four years to fully get back on track. There’s a lot of fence mending to do with our allies and a lot of mistakes to rectify but the correct road ahead shouldn’t be that hard to follow. And we must try.

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