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.