It’s difficult to grasp just how ignorant Trump trade advisor Peter Navarro is about trade. Nearly everything that Navarro says or writes about trade is not only mistaken, it’s also downright backward. (I’m being kind by prefacing the previous sentence with the word “nearly.”) Indeed, Navarro’s complete cluelessness about the subject on which he is regarded by many to be an expert would be comical were the inevitable consequences of following his policy advise not so horrible.
My Mercatus Center colleague Dan Griswold recently summoned up the strength-of-stomach to watch Navarro’s 2012 “shock-u-drama” film, “Death by China.” When I reflect on this film, as recounted by Dan, words fail me. Fortunately, words do not fail Dan. Read all of Dan’s smack-down of Navarro, but here are some slices from Dan’s blog post:
“Death by China” is as subtle as Navarro himself, which is to say, not at all. It is 80 minutes of talking heads, gruesome photos, and low-budget graphics, all in support of the thesis that imports from China are killing us, economically and literally. The message from beginning to end is that a flood of “illegally subsidized and dangerous” imports from China has devastated America’s manufacturing base and put millions of Americans out of work. A key to making American great again is to stop importing stuff made in China.
Trade with China is a serious subject. It raises important questions about the benefits of trade, the evolution of manufacturing, and geo-strategic relations in East Asia. The film “Death by China” is not a serious treatment of the subject, and its manifold exaggerations, misstatements, and omissions raise disquieting questions of their own about where President Trump’s trade policy towards China will lead us.
Based on the false assumption of a “flood” of Chinese imports to the United States, “Death by China” makes the unsupported leap that those imports have devastated American manufacturing. In case you don’t get the connection, it features computer generated graphics that show bombers flying from China across the Pacific and carpet bombing U.S. factories.
Back in reality, the United States remains a manufacturing powerhouse. In 2016, U.S. workers in U.S. factories on U.S. soil produced a record $2.17 trillion in manufacturing value added. In the 2001–2012 timeframe covered in “Death by China,” when U.S. factories were supposedly being laid waste by Chinese imports, real manufacturing value added in the United States rose by $290 billion, or almost 20 percent. Real output did fall in factories making furniture, paper products, textiles, apparel, and plastic and rubber products, while output rose far more in factories making computer and electronic products, motor vehicles and parts, chemical products, and machinery.
This is how international trade is supposed to work. It allows Americans to make more of what we are best at, in this case more capital intensive, sophisticated products, while shifting resources away from making more labor intensive products that we are not so competitive at making, such as clothing and furniture. This has been the trend in U.S. industry for decades, long before China re-emerged as a trading nation.