Trump advisor Navarro threatens retaliation against China

White House Trade and Manufacturing Policy Director Peter Navarro speaks during the daily briefing on the novel coronavirus, COVID-19, at the White House on March 22, 2020, in Washington, DC.

Eric Baradat | AFP | Getty Images

White House advisor Peter Navarro on Monday threatened retaliation against China for its role in the spread of the coronavirus pandemic as tensions between the world’s two largest economies continue to rise. 

“A bill has to come due for China,” Navarro said during an interview on CNBC’s “Squawk Box.” “It’s not a question of punishing them, it’s a question of holding China accountable, the Chinese Communist Party accountable.”

Navarro is one of the chief China hawks in President Donald Trump’s administration and serves as the director of the Office of Trade and Manufacturing Policy.

He declined to say whether he was advising the president to impose new tariffs or scrap the “phase one” trade deal reached between the two countries earlier this year. 

“They inflicted tremendous damage on the world which is still ongoing,” Navarro said. “We’re up to close to $10 trillion we’ve had to appropriate to fight this battle.”

Trade negotiations between the two countries have been complicated by Covid-19, which spread around the globe and tanked world markets after the phase one trade deal took effect in February. The deal requires China to up its purchases of U.S. goods including agricultural products by $200 billion over two years.  

In addition to slumping global demand, the public health crisis has spawned a war of words between the two nations, which have each sought to lay blame at the other’s feet. 

Trump, who has said he believes coronavirus was caused by a Chinese “mistake,” said on Friday that he was “very torn” over whether to stay in the phase one deal.

Scientists and the U.S. intelligence community have said that the virus emerged naturally and China has denied allegations that it came from a laboratory. 

“I’m very — I’m very torn as to — I have not decided yet, if you want to know the truth,” Trump said during an interview on Fox News when asked if he would scrap the deal. 

Despite the president’s comments, trade negotiators have continued to talk. 

On Thursday, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu He about the agreement. The three officials agreed to move forward with phase one “in spite of the current global health emergency,” according to a statement put out by the American side.  

It’s not clear, however, whether talks on future phases are still in the works. At the time the phase one deal was reached in January, U.S. officials said that lingering issues between the two countries would be hammered out in successive phases.

Thursday’s statement from Lighthizer and Mnuchin did not mention the prospect of future deals. Trump, who has touted the trade agreement with China as one of his top achievements, will face reelection in November.

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