'Trying to understand': CNN anchor struggles to keep straight face as Trump aide rambles
President Donald Trump's manufacturing adviser, Peter Navarro, known for his unconventional ideas about trade, went on CNN to explain to anchor Phil Mattingly about the administration's thinking behind the "Liberation Day" tariffs sending shockwaves through markets and potential fears of a recession.
And it was all Mattingly could do to keep a straight face as Navarro pushed dubious ideas about how trade works.
Navarro, who served a short stint in prison last year for refusing to cooperate with Congress' investigation into the Jan. 6 attack, began by discussing trade deficits — which to most economists are simply a measure of how much more the United States imports than exports, and is not inherently bad or dangerous for the economy.
But not in Navarro's reckoning.
"Should the U.S. have chronic and sustained trade deficits? No," said Navarro. "According to economic theory, they should not. So what the trade deficit does for any given country, it's the sum of all cheating. It's the sum of all unfair trade practices. And in a national emergency where the trade deficit itself is the national emergency and security threat, because it takes our factories, our jobs and transfers wealth abroad, the reciprocal tariff is that which reduces the trade deficit with each country to zero."
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"I think that when you look at the — the memorandum that laid out the process to get to yesterday, on January 20th, the — in terms of trade flows, this was — the deficit is a huge, it's the first paragraph. It's in the first paragraph of the first directive as well. It is clearly kind of the cornerstone of how you guys are approaching this. And what I'm trying to understand here is, it's a different method. I understand you don't believe trade economists understand what they're talking about. You don't believe—"
"No, no," cut in Navarro. "Actually, actually, we used the methods of the trade economists in order to estimate what you need to go to zero in the trade deficit, based on commonly accepted elasticities estimated over the last 30 years. It's a very sound methodology."
Navarro then went on to explain that Trump set his tariffs based on more than just what each country is setting in tariffs already, as Mattingly appeared more and more confused by the logic.
"Hey, the president has been saying going back to the 1980s about Japan is, why is it that 95 percent of the cars in Japan are made in Japan?" said Navarro. "One of the reasons is they have a human impact test that requires us to imagine what it's like for a human skull to fall on a hood, and they simulate it with a bowling ball. We can't get the cars in there. It's any — you name any country, friend or foe."
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