WASHINGTON—President Trump’s senior trade adviser, Peter Navarro, excoriated China and attacked Goldman Sachs and Wall Street as Beijing’s “unpaid foreign agents” who are weakening the U.S. leader before his meeting this month with China’s president.
Less than a mile away from where Mr. Navarro spoke, Secretary of State Mike Pompeo and Defense Secretary Jim Mattis met with their Chinese counterparts to try to mend fences with Beijing, while discussing North Korea, Iran, the South China Sea and trade.
They emerged with a consensus on some issues and differences on others.
The mixed messages reflect bitter tensions in the Trump administration about how to approach China.
Mr. Navarro and U.S. Trade Representative Robert Lighthizer are deeply skeptical that China will make the kinds of the changes sought by the Trump administration and urge additional tariffs.
Other officials, including Treasury Secretary Steven Mnuchin and National Economic Council Director Larry Kudlow, have been trying to line up a deal. Mr. Trump sometimes favors one group and sometimes the other.
Decoding Xi Jinping’s Strategy on Trade
As a summit with Chinese President Xi Jinping looms at the Group of 20 meeting in Buenos Aires, the economic council is coordinating what kind of trade deal the U.S. might accept from China. It is focusing on intellectual property, agricultural tariffs, forced technology transfer and requirements that U.S. firms form joint ventures to operate in China.
Mr. Navarro is pushing for a hard line on the talks, but made his position in an unusually personal terms.
“If Wall Street is involved and continues to insinuate itself in these negotiations, there will be a stench around any deal that’s consummated because it will have the imprimatur of Goldman Sachs and Wall Street,” Mr. Navarro said in a talk at the Center for Strategic and International Studies, a Washington think tank. He didn’t provide any evidence to back up his claims. A
Goldman Sachs Group
spokesman declined to comment.
Mr. Navarro also trained his rhetoric on Mr. Xi, who he said had failed to live up to deals with the Obama administration on demilitarizing the South China Sea and ending cyber hacking of U.S. firms. He referred to a “high-ranking member of the Chinese government,” in his address, but his description only fit Mr. Xi.
A senior White House official said Mr. Navarro didn’t speak for the administration or Mr. Trump. “It’s the president who rejuvenated the China negotiations” when he called Mr. Xi on Nov. 1, he said. Mr. Navarro “is freelancing; he’s speaking for himself.”
The security dialogue, initiated last year by Messrs. Trump and Xi, aims to boost cooperation between the two powers. Mr. Trump frequently refers to Mr. Xi as a friend and others in the administration rarely criticize him personally, as a way to create political space for potential deals.
“This was an incredibly productive conversation,” Mr. Pompeo said after the meeting in Washington with senior Communist Party official Yang Jiechi and Defense Minister General Wei Fenghe. “The United States is not pursuing a Cold War or containment policy with China, rather we want to make sure ensure that China acts responsibly and fairly.”
The two sides said they reinforced their commitment to complete denuclearization of the Korean Peninsula and discussed Iran’s nuclear activities.
The two sides said they reinforced their commitment to complete denuclearization of the Korean Peninsula and discussed Iran’s nuclear activities. But Mr. Pompeo said there remained “significant differences” over the militarization South China Sea islands, China’s policy toward Taiwan and human rights.
Mr. Pompeo didn’t address trade issues but senior Communist Party official Yang Jiechi suggested they discussed the subject, noting that a trade war isn’t good for either side. On trade, the fight appears to be as much within the U.S. administration as with China.
Mr. Navarro, in his talk, took a subtle jab at his main adversary, Mr. Mnuchin, who has tried to sideline Mr. Navarro and arrange talks with Beijing. Mr. Navarro said, “You’re not in good hands when negotiations get outside” of Messrs. Trump and Lighthizer.
Mr. Navarro lashed out at what he called “a self-appointed group of Wall Street bankers and hedge-fund managers” who he described as “globalist billionaires.”
“The mission of these unregistered foreign agents—that’s what they are; they are unregistered foreign agents—is to pressure this president into some kind of deal,” Mr. Navarro said.
While administration trade hawks frequently rail privately against U.S. executives who acts as back channels between the two nations, it rare for one to do so publicly. For one thing some of the executives, including Blackstone Group LP CEO Stephen Schwarzman, are friends of the president and speak to him frequently.
Others including former Goldman Sachs Chief Executive Hank Paulson, who was President Bush’s Treasury secretary, consults with Mr. Mnuchin. Mr. Schwarzman declined to comment. A spokesman for Mr. Paulson didn’t respond to a request for comment.
The U.S. complains that Beijing hasn’t given it a formal proposal, while China says that it needs to meet again, before the summit, before it can offer something concrete.
While the administration is refining what it wants from China—essentially trying to create a negotiating bottom line—it is also lining up additional tariffs should negotiations stall. So far, the U.S. has imposed tariffs on $250 billion in Chinese goods, about half what China sends to the U.S. Of that, the levies on $200 billion of goods are scheduled to increase to 25% on Jan. 1 from the current 10%.
The administration is also putting the finishing touches on prospective tariffs on most of the rest of Chinese imports, said the senior White House official. Administration and business officials expect that any additional tariffs would exempt mobile phones and perhaps laptops, to reduce the chance of a reaction by consumers hit with a big price increase.
Appeared in the November 10, 2018, print edition as ‘White House Tensions Grow Over China.’