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Why Peter Navarro calls USMCA ‘very good news’ for American manufacturing

President Trump’s new North American trade deal, the United States-Mexico-Canada-Agreement, known as USMCA, was applauded at the White House Wednesday, with Mexican President Andrés Manuel López Obrador visiting. But along with the celebration come questions about what the pact means for the U.S. economy. Peter Navarro, Trump's trade adviser, joins Judy Woodruff to discuss the details.

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  • Judy Woodruff:

    President Trump's new North American trade deal, the United States-Mexico-Canada agreement, known as USMCA, was celebrated at the White House yesterday.

    Along with it come questions about the trade deal and what it means for the American economy.

    Peter Navarro is President Trump's trade adviser. And he joins us now from the White House.

    Peter Navarro, welcome again to the "NewsHour."

    So, President Trump called the predecessor to this deal the worst trade deal ever. In a sentence, how is this trade agreement better?

  • Peter Navarro:

    NAFTA, which Joe Biden and a lot of other people voted for in 1992, was structured in a way, Judy, so that American jobs were lured into Mexico by Mexico's cheap labor and environmental controls.

    And Mexico lost a lot of its supply chain to China. What USMCA does is turn that completely on its head. It's structured in a way to make North America the manufacturing powerhouse of the world, in a way that helps American workers.

    And this is the most important part. It has local content regulations, which provide, for example, in automobiles, that a certain percentage of that has to be American-made. And to ensure that the jobs don't go south, there's also strict wage and environmental restrictions on Mexico.

    So, this is a situation where, rarely, in a trade deal, Mexico, Canada, and the U.S. all benefit.

  • Judy Woodruff:

    So, let me ask you about that, because, right now — this deal does take effect as of yesterday, but it comes as all three countries are mired in recession because of the pandemic.

    And my understanding is that many of the deal's requirements, like expanding worker rights, opening up the flow of agriculture, these things have not been fully met, even as it has been signed. So, there's still work to do.

  • Peter Navarro:

    Well, there's certainly work to do, but it's nonetheless very good news for our manufacturing industries in North America.

    And, also, it has things in it like relief for dairy farmers in places like Wisconsin, where the Canadians were putting exorbitant tariffs on. But the bigger picture here, Judy, is that we're in a situation now where, in the 2000s, China cheated on its trade deals, and we lost millions of American jobs.

    What we have now is a situation where the Chinese Communist Party lied about this virus. The pandemic came here. And now not only are Americans dying in large numbers. We have 30 million Americans unemployed. And we're facing significant structural headwinds because of the Chinese Communist Party.

    Now, what I can tell you is that we are working overtime trying to make sure that we're bouncing back. So far, the numbers look good. But it's also true, Judy, that we're going to face structural headwinds as we move in time, as industries, like hospitality and transportation, entertainment all suffer from these pandemic effects from China.

    And what the mission of the president is, is to use his deep understanding of economics and business to make sure we navigate through those shoals.

  • Judy Woodruff:

    Well…

  • Peter Navarro:

    So, in the next couple of weeks, there is going to be a new phase four deal that's going to be negotiated on Capitol Hill.

    And, in the meantime, we're doing everything we can to bring our manufacturing jobs back to U.S. soil, which is going to be the key to reemploying those service sector refugees we lose in those — the beleaguered sectors.

  • Judy Woodruff:

    OK. So you're making a number of allegations here about the Chinese. And I know a number of other countries have looked at this virus as well.

    But they seem to be doing a lot better than the United States in terms of keeping it under control. You're putting all the blame right now on China.

  • Peter Navarro:

    Yes.

  • Judy Woodruff:

    And yet, the United States, as you know, is leading the world in the number of people infected, the number of people who have died.

    And there's — there are fingers pointed at this president's leadership.

  • Peter Navarro:

    Sure. And…

  • Judy Woodruff:

    So, I mean…

  • Peter Navarro:

    Let me say…

    (CROSSTALK)

  • Peter Navarro:

    Sure.

  • Judy Woodruff:

    So, what I want to ask you is, if you look at this economy, and you look at the president's leadership, I mean, you can't just point at China.

  • Peter Navarro:

    Well, I can just point in China, in the following sense.

    The reason why we have so many cases, and China has less, is this. Not only did China spawn the virus in November. They hid it about two months. During that time, China restricted travel within China to contain the virus, but they sent thousands of Chinese nationals on aircraft, which many of them were infected…

  • Judy Woodruff:

    Well…

  • Peter Navarro:

    … then spread the seed of that virus. So, that's part of the problem we're facing now.

    Now, here's the thing, Judy. We're now in a situation, after going through several months of lock — economic lockdown, where we have really hard choices to make. And these are the hardest choices a president ever has to make. How fast do we open up the economy?

    What we have learned in the first wave is that a complete shutdown has tremendous economic damage, but it also kills people. It kills people through alcoholism, depression, more drug use, things like that.

    So, what we're trying to do now is balance that as we open up, and it's a work in progress. We had hoped that the virus would subside somewhat in the summertime with the heat and humidity. Virtually every scientist thought that was going to happen. It hasn't. But we're managing that.

    And the good thing here, Judy, is that — and I'm directly at the center of much of this — we are building our strategic national stockpiles with personal protective equipment and medicines. That's going very well.

  • Judy Woodruff:

    Well, I don't…

  • Peter Navarro:

    We're much more sophisticated now about managing the issue.

    But, you know, this is war. This is a wartime president. This is the Chinese virus. And I'm not going to sugarcoat anything today. We have got a fight on our hands.

  • Judy Woodruff:

    Well — and there are so many things to raise with you about all that you have said, Peter Navarro.

    But, specifically, let me just move quickly ahead to what Joe Biden said today. He raised — he has now rolled out his own plan for improving the economy.

    He said, this president has created an economy that caters to Wall Street. And what he's doing — he said: "I have got a plan that's going to bring back jobs that have been lost this year. I'm going to create at least five million more jobs, with sweeping investments in domestic technology. I'm going to reduce our dependence on foreign countries that supply critical goods. I'm going to implement trade and tax policies that empower U.S. workers."

    In other words, he is saying this president has failed on all those fronts.

  • Peter Navarro:

    So, Joe Biden was around for 44 years, and basically helped oversee the offshoring of American jobs, turned his back on workers.

    In three-and-a-half years, leading up to January 15, this president was the greatest president, jobs president, in history. And in terms of catering to Wall Street, guess what? We had the lowest unemployment rate ever in history for blacks, Hispanics, Asians, women.

    And this — everything looked great because of the president's policies. Now, I thought it was — you know the saying imitation is the sincerest form of flattery. When I looked at Joe Biden's plan, all he was doing was copying all the things that we have been doing as an administration with respect to buy American, onshoring jobs, increasing manufacturing.

    Don't forget, Judy, during the Obama-Biden years, they lost 200,000 manufacturing jobs net. During this presidency, we have added over a half-a-million. So, remember, 44 years of Joe Biden, nothing but offshoring American jobs, three-and-a-half years, the greatest jobs president in history.

  • Judy Woodruff:

    If I could quickly quote, there's reporting today that Steve Bannon, who, of course, has been a close adviser to the president, said, when it comes to this buy American proposal from Joe Biden, that the Trump administration was caught flat-footed.

    There's reporting that the administration's been trying to get — put together its own proposal, — quote — "buy American proposal," but it hasn't been able to come to an agreement.

    Has the administration, has the White House been delayed in trying to come up with your own proposal on how to improve the economy?

  • Peter Navarro:

    Yes, I have personally watched the president sign five different buy American orders.

    We have had a tremendous reduction in waivers. We have had a tremendous increase in the amount of government procurement that goes to buy American. We have had a great success with buy American. It is the president's two simple rules.

    The next challenge we face, and this is going to be a very difficult one, but we are committed and engaged, which is to bring our medicines and our medical splice and equipment, production and supply chains, home. And it's a struggle, but we have seen — for example, we brought factories in Arizona and Rhode Island on N95 masks.

    We have stood up a factory in 17 days in Kokomo, Indiana, by General Motors. And we have become the ventilator export king of the world. We are producing 20 million swabs now a month in Guilford, Maine.

    So, we are the buy American presidency. And I'm proud to have been at the president's side when he signed the orders. And I have been very active in terms of implementing them. We have work to do on the pharmaceutical and supply chains.

  • Judy Woodruff:

    Two other quick questions about China.

    There was a China trade deal that had been negotiated before the pandemic hit. It required China to buy more U.S. goods, but there wasn't enforcement as part of that.

    Can you require that China do what it was supposed to do under that agreement?

  • Peter Navarro:

    There are clear enforcement mechanisms in the phase one deal.

    The — to date, it's absolutely true that China has underperformed with respect to its purchases, but we have been assured by the Chinese that, by the end of the year, they will make good on those.

    But this is Ronald Reagan territory, trust, but verify. Let's see what happens. Let's remember what I told you at the beginning of this interview. During the 2000s, China cheated and stole our jobs. Today, they lied to us, and they're killing Americans with that virus.

  • Judy Woodruff:

    And does President Trump still consider President Xi Jinping a friend?

  • Peter Navarro:

    You would have to ask the president that.

    But I can assure you that there's no one inside the perimeter of this White House that has a high level of trust in the Chinese Communist Party at this point, particularly with respect to their behavior on this Chinese virus.

  • Judy Woodruff:

    Peter Navarro, thank you very much.

  • Peter Navarro:

    Thank you, Judy.

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