Former director of the US Office of Trade and Manufacturing Policy Peter Navarro speaks on stage with his “Wife Bonnie” on the third day of the Republican National Convention at the Fiserv Forum on July 17, 2024 in Milwaukee, Wisconsin.
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Peter Navarro, who is set to become the top trade advisor to President-elect Donald Trump, argued Tuesday that Trump’s plans for broad tariffs and steep tax cuts will not spur inflation or raise deficits, despite warnings from some experts.
Navarro said Trump’s first term in the White House proved his point.
“We put on significant tariffs on China, steel, aluminum, dishwashers, solar, a lot of increased countervailing duties to stop the dumping,” Navarro said on CNBC’s “Squawk Box.”
“We had zero inflation from any of that,” he said.
Trump imposed tariffs on China during his first term. President Joe Biden‘s administration kept many of them in place.
“So I would say that just go back and play all the interviews that were done on CNBC of people back in the first term with their hair on fire, worrying about inflation,” said Navarro.
“It never happened, and it’s the same movie this time,” the 75-year-old China hawk added.
Navarro, whom Trump picked earlier in December to be his senior counselor for trade and manufacturing, argued that the inflation that hung over Biden’s term was caused by “fiscal irresponsibility.”
During his recent campaign, Trump said he wanted to enact much larger and broader tariffs, plus additional targeted duties on imports from China.
Since winning the election, he has issued additional tariff threats on Mexico and Canada.
Trump also has suggested a laundry list of proposed tax cuts, including further lowering the corporate tax rate, as well as eliminating taxes on tips for service workers and on Social Security benefits for seniors.
He has also vowed to extend tax cuts implemented during his first term, some of which are set to expire at the end of 2025.
The national debt increased during Trump’s first term, even before the Covid-19 pandemic in 2020.
Asked how Trump hopes to keep deficits under control while pursuing new tax cuts, Navarro on Tuesday again pointed to the example of the first administration.
Navarro argued that before the pandemic, the U.S. was “steadily gathering more and more strength in the economy.”
“And if we had had a clean fourth year without the pandemic, I think you would have seen a much different fiscal picture at the end of the first term,” he said.
Navarro claimed that economic growth in the next term will come from boosting domestic oil-drilling efforts, and predicted “tremendous cost savings within the government to pull back the fiscal overhang.”
“We’re keenly aware of the need to engage in fiscal responsibility and prudent Fed policies that will help the American people afford what they need,” he said.
