A Conversation With the Architect of Trump's New Trade War

Summary

Podcast Summary: The Daily – "A Conversation With Trump’s Tariff Czar"

Release Date: February 18, 2025

Introduction

In the February 18, 2025 episode of The Daily, hosted by Rachel Abrams and Ana Swanson, listeners are immersed in an in-depth discussion with Peter Navarro, a pivotal figure in former President Donald Trump's economic policies. Titled "A Conversation With Trump’s Tariff Czar," the episode delves into Navarro's journey from academia to becoming a key advisor on trade, his staunch support for tariffs, and the broader implications of his policies on the American economy and international trade relationships.

Peter Navarro’s Evolution: From Democrat to Tariff Advocate

The episode opens with Rachel Abrams outlining the resurgence of trade conflicts under President Trump, highlighting the significant increase in tariffs imposed on both adversaries and allies. Ana Swanson introduces Peter Navarro, the so-called "tariff czar," and explores his transformation from a Democrat to a staunch Trump Republican.

Background and Early Influences

Peter Navarro shares his personal history, emphasizing his working-class roots and how his upbringing shaped his economic perspectives. He recounts his time with the Peace Corps in Thailand, which broadened his worldview and instilled a deep-seated interest in global trade dynamics (03:02). Navarro’s academic pursuits at Harvard and subsequent teaching role at UC Irvine further solidified his focus on government and economic policies.

Catalysts for Change: NAFTA and China’s WTO Entry

Swanson and Navarro discuss two pivotal moments that influenced Navarro’s stance on trade:

1. NAFTA (1994): The North American Free Trade Agreement marked the U.S.’s first major free trade pact with a developing country—Mexico. Navarro observes that this agreement set the stage for increased globalization but also sowed the seeds for manufacturing job losses in the U.S. (06:17).

2. China’s WTO Membership (2001): China's entry into the World Trade Organization exponentially amplified global trade interactions. Navarro identifies this as a critical juncture where China began to exert substantial influence over global manufacturing, leading to what he terms the "China price"—the ability of Chinese firms to offer products at significantly lower prices than their American counterparts (07:55).

The Rise of Anti-China Sentiment and Advocacy

Navarro details his response to the growing economic disparities caused by Chinese trade practices. Frustrated by what he perceives as unfair advantages—such as currency manipulation and intellectual property theft—he authored "The Coming China Wars" and produced a documentary narrated by Martin Sheen to raise awareness. Although initially criticized, Navarro remained steadfast, believing that traditional media and academic institutions failed to grasp the severity of the issue (08:36; 09:21).

Alliance with Donald Trump

The conversation shifts to Navarro’s relationship with Donald Trump. They recount how Trump first recognized Navarro’s expertise during a 2011 Los Angeles Times interview, where Trump listed Navarro's book among his top recommendations on China. This mutual recognition blossomed into a close working relationship, culminating in Navarro’s appointment as a senior advisor in Trump's administration. Despite internal resistance from other advisors, Navarro's persistence led to the implementation of significant tariffs on steel, aluminum, and over $300 billion worth of Chinese goods (12:24; 14:57).

Implementation and Impact of Tariffs

Navarro passionately defends the tariff strategy, arguing that it serves as a protective shield for American industries against unfair foreign competition. He contends that by imposing tariffs, the U.S. can incentivize domestic production, preserve manufacturing jobs, and ensure national security through a resilient supply chain. Notable quotes include:

• Peter Navarro: “Tariffs do not cause inflation when they're imposed by the largest market in the world.” (21:31)
• Navarro on Surpassing Criticism: “The academic community can't be trusted to critique Trump economics. And they have a credibility problem because they've been crying this wolf.” (22:30)

Debating the Economics of Tariffs

Swanson challenges Navarro on the commonly accepted economic principle that tariffs lead to higher consumer prices. Navarro dismisses these criticisms, asserting that the American market’s size allows the country to absorb tariff costs without causing inflation. He highlights that during Trump's first term, aggressive tariff implementations coincided with zero inflation, according to his perspective (20:07; 21:46).

However, Swanson brings up various studies by prominent economists that contradict Navarro's claims, indicating that consumers did bear the brunt of tariff-induced price hikes. Despite this, Navarro maintains that the long-term benefits of tariffs—such as higher wages and increased consumer spending power—will outweigh any short-term disadvantages (21:28; 25:13).

National Security and Economic Resilience

Navarro emphasizes that economic policies, particularly tariffs, are intrinsically linked to national security. He argues that a robust domestic manufacturing base is essential for national defense and economic stability, especially in the wake of global disruptions like the COVID-19 pandemic. This perspective aligns with his broader mantra of prioritizing economic security as a pillar of national defense (27:59).

Controversies and Legal Challenges

The episode also touches upon Navarro’s legal troubles following the Trump administration. After refusing to comply with a congressional subpoena related to the January 6th hearings, Navarro was incarcerated but later released to speak at the Republican National Convention. He frames his actions as a defense of constitutional principles, further cementing his loyalty to Trump’s agenda (15:17; 16:16; 17:02).

Future Implications and Policy Directions

Looking ahead, Navarro asserts that tariffs will continue to play a central role in Trump's second term. He envisions a transformed American trade landscape, with increased domestic production and reduced reliance on foreign imports. Navarro remains optimistic that these policies will lead to higher wages and greater economic prosperity for American workers, dismissing concerns about potential negative repercussions (19:23; 29:50).

Conclusion

The episode concludes with Ana Swanson highlighting the ongoing "grand experiment" of imposing extensive tariffs to revitalize American manufacturing and balance trade relationships. While acknowledging the aggressive nature of these policies, Swanson underscores the uncertainty surrounding their long-term efficacy and impact on the broader economy.

Notable Quotes

• Peter Navarro: “When I did my Death by China movie, I went to Dayton. I saw the people who would otherwise be in factories walking around with shopping carts, stealing copper out of homes and buildings, whatever they could, and then going and using the money to get high.” (11:53)

• Navarro on Tariffs and Inflation: “President Trump... has proven that tariffs work for the American people, and they're going to be even more important this second term.” (29:31)

Key Takeaways

• Navarro’s Vision: Strong advocacy for tariffs as essential tools for protecting American industries and ensuring economic and national security.

• Policy Implementation: Successful imposition of substantial tariffs during Trump's administration, reshaping trade dynamics but accompanied by significant economic and social repercussions.

• Economic Debate: Ongoing contention between Navarro’s supportive views on tariffs and mainstream economic consensus highlighting potential adverse effects on consumers and businesses.

• Future Outlook: With Trump’s return to office, Navarro remains a central figure in pushing for even more aggressive trade policies, setting the stage for further economic transformations.

This comprehensive conversation with Peter Navarro provides listeners with a nuanced understanding of the motivations, strategies, and controversies surrounding one of the most influential economic policies of recent times. Whether one agrees with Navarro's perspectives or not, his role in shaping America’s trade landscape is undeniably significant.

Transcript

[Peter Navarro]

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[Rachel Abrams]

From the new York Times, I'm Rachel Abrams. This is the Daily President Trump says he's going to announce so called reciprocal tariffs on every country with duties placed on the US with less than a month in office, we're just hours into a new trade conflict. President Trump has pursued more trade actions against adversaries and allies than all the trade measures he took in his entire first term. Her tariffs, ordered by President Trump, went.

[Ana Swanson]

Into effect at midnight. Canada and Mexico will be among the.

[Rachel Abrams]

Hardest hit by these tariffs.

[Ana Swanson]

These tariffs more than triple what was done during the first term.

[Rachel Abrams]

And there's one man guiding it all.

[Peter Navarro]

President Elect Trump choosing Peter Navarro for a top economic position in his next administration.

[Rachel Abrams]

Today, my colleague Ana Swanson on how Peter Navarro rose to become one of Trump's key advisors and why he thinks tariffs will usher in a new era of American prosperity.

[Ana Swanson]

Foreign.

[Rachel Abrams]

It's Tuesday, February 18th. Hi Anna.

[Ana Swanson]

Hey, how are you?

[Rachel Abrams]

Good. Thank you for being here. I wanted to talk to you because you covered President Trump in his first term and you focused a ton on international trade. So I figured you would be the right person to talk to and help me understand this key advisor, Peter Navarro, who who's been advising Trump on all of these tariff policies that we've been hearing about recently.

[Ana Swanson]

Right. So I met Peter Navarro when I was covering trade policy in Trump's first term. And he's an interesting person because he had a very unusual journey to the White House and he had views about trade in China that were considered pretty unconventional and unpopular. But over time, these views have become one of the driving forces of Trump's trade policy.

[Peter Navarro]

So pleased to see you after four long years of exile.

[Ana Swanson]

So recently I went to see him again with two colleagues from the Daily.

[Peter Navarro]

I actually listen to the Daily. I have it on my podcast.

[Ana Swanson]

We met him at the Eisenhower Executive Office Building, which is just west of the White House.

[Peter Navarro]

We're gonna turn to the right here.

[Ana Swanson]

And we sat down with him in his office to understand how he came to have These ideas about trade and tariffs.

[Peter Navarro]

So you want us here and now.

[Ana Swanson]

That he's in the role that he's in, what his ideas could mean for the country. So, Dr. Navarro, you are synonymous with Donald Trump and his agenda. But not all that long ago you were a Democrat. So tell us that story. Where does that story start?

[Peter Navarro]

It went from being kind of a Democrat to being a Trump Republican. And the reality is that there's not much difference between that. The traditional Democratic Party was a lot like MAGA in that it was the party of the working class, American manufacturing blue collar workers. The goal of that party, at least what it said it was, was to increase the real wages and prosperity of blue collar workers. And I was very comfortable with that. I was. I grew up in a single family household with my mom. We had a hard life, and I identify to this day with the working class.

[Rachel Abrams]

So when you started talking, what did you learn?

[Ana Swanson]

So he talked about being raised by a single mom, how he was a latchkey kid. He also loves school, and he did well. And he goes on to Tufts University. And after he graduated in the 1970s, he's thinking he wants to see what the world is like and travel a little bit.

[Peter Navarro]

I became really intrigued by Thailand. And one day as I was thinking that maybe I should go there.

[Ana Swanson]

And then one day, kind of randomly, he's walking around the Berkeley campus and this guy asks him, hey, want to go to Thailand?

[Peter Navarro]

And I looked over and it was the Peace Corps table.

[Ana Swanson]

And that guy happened to be recruiting for the Peace Corps.

[Peter Navarro]

Of course, I had to say yes because of the synchronicity of the whole thing. I don't want to get too Californian on you, but that was an interesting moment.

[Ana Swanson]

And so Navarro decides to go Peace Corps.

[Rachel Abrams]

I feel like that's a really unusual stop along your way to becoming tariff czar.

[Ana Swanson]

Yeah. He says he wanted to learn about different cultures and got to travel a lot around Asia.

[Peter Navarro]

I mean, the whole ability to see the world from outside the United States, it makes you very humble. And when I came back, it motivated me to go into policy.

[Ana Swanson]

And when he came back, he ended up at Harvard studying government and economics. In the 80s, he finished his PhD, he moves out to Southern California, and he starts teaching economics and public policy at UC Irvine. And then he decides to run for mayor of San Diego.

[Peter Navarro]

My only goal as mayor was to address the problems of traffic congestions, the overcrowded schools, the awful sewage system. I mean, it was a populist campaign just at the local level, on a different set of issues. I mean, I sometimes joke, I was like mini Trump before Trump, because he loses that election.

[Ana Swanson]

And over the next several years, a couple of huge economic policy shifts happen that really shape his thinking. First in 1994 comes NAFTA, the North American Free Trade Agreement. And this is a really important moment for the US Economy because this was the first time that the US Was engaging in a free trade agreement with a developing country, Mexico. And then in 2001, China enters the World Trade Organization. This other big moment in trade that really shifts the politics of trade in America.

[Rachel Abrams]

So it sounds like you have these two big moments where America is really becoming much more globalized in its manufacturing processes. You've got NAFTA where it's signing agreements with places like Mexico and opening itself up to other countries. And then you've got this moment when China joins the World Trade Organization, which really brings China onto the world main stage in a way that it hadn't been before.

[Ana Swanson]

That's right. And it's after these big policy shifts when Navarro starts to see something happening with his students that bothers him.

[Peter Navarro]

I was the macroeconomist, teaching business students how to forecast the economy. And in about 2002 and 3, I began to notice that the business students who were in the fully employed program were losing their jobs. And it was like, what's going on here?

[Ana Swanson]

He's trying to figure out what's going on, and he lands on something that he calls the China price.

[Rachel Abrams]

And what's that?

[Ana Swanson]

So he's observing this strange ability for Chinese firms to offer prices that are so much lower than other competitors, 50% lower prices. And he's saying that is starting to put US Manufacturers out of business. So he does a study to try to understand just how they're getting their prices so low.

[Peter Navarro]

It wasn't simply low wages.

[Ana Swanson]

So one way companies could get their prices low is by paying their workers lower wages. But Navarro finds that China is doing.

[Peter Navarro]

A lot more than that, like currency manipulation, like counterfeiting and piracy, the use of pollution havens, things like that.

[Ana Swanson]

And he's so troubled by this that he ends up writing three books on China. The first was called the Coming China Wars.

[Peter Navarro]

It just got skewered in the Financial Times.

[Ana Swanson]

That book gets panned. You remember anything from the skewering any?

[Peter Navarro]

Oh, it's just, you know, it's just radical, crazy guy, you know, this kind of thing, Right. And I thought, look, these people don't get it, except among all of the corporations and unions and plain old folk that were getting just Hammered. It's like, okay, let's keep going on this. And I'm thinking, you know what? People read books, but not a lot of them anymore, so let's do the movie.

[Ana Swanson]

And then he also creates a documentary which is narrated by Martin Sheen.

[Peter Navarro]

And it was the same kind of reaction Hollywood. And it's like, oh, you're exaggerating stuff.

[Rachel Abrams]

Ana, how would you characterize Navarro's view of all of this? Is his assessment of what China is doing fair?

[Ana Swanson]

He's right that a lot of people agree now that the Chinese government was not playing by international trade rules. But even if they were, I think the entry of basically a billion people into the global economy would have been a huge shock either way. And it ends up being kind of complicated in terms of who benefited and who lost.

[Rachel Abrams]

Okay, so let's talk about that. Tell me what some of the benefits are first.

[Ana Swanson]

So the first benefit is that you do have a lot of Chinese people lifted out of poverty. So hundreds of millions of Chinese people who are moving out of poverty into the middle class. And then you have basically the American standard of living today created. You know, how many people do you know who love Costco, who love to buy inexpensive things off of Amazon? A lot of that is made possible by this China price, by Chinese factories making cheap goods. But there were definitely a lot of downsides as well. So you have a lot of US Factories going out of business because they can no longer compete with the cheap prices that Chinese firms are offering. And you have millions of US Manufacturing jobs that were destroyed in that process. Economists have found, and I don't think they anticipated just how hard the people on the losing end would be hit. There was this assumption that people who lost their jobs due to trade could be helped to move to find other jobs or go through retraining programs that would give them, you know, even better jobs in this new economy. And they didn't anticipate, I think, that this transition was a lot more disruptive and painful. And the pain was really localized and vivid and sharp, particularly in the industrial Northeast and Middle east, where people now are really hurting because they don't have factory employment anymore. And economists have found that then other problems follow, like drug addiction. And these are all things that Peter Navarro was focused on, too.

[Peter Navarro]

Actually, when I did my Death by China movie, I went to Dayton. I saw the people who would otherwise be in factories walking around with shopping carts, stealing copper out of homes and buildings, whatever they could, and then going and using the money to get high.

[Rachel Abrams]

It really does sound like Peter Navarro is ringing the alarm bell on China kind of well before a lot of other people are. How does he actually get attached to Donald Trump, though?

[Ana Swanson]

So Trump at this point has been complaining about China and its trade practices for a really long time.

[Peter Navarro]

President Trump, the way we intersected was through an interview, interestingly enough, that he did for the Los Angeles Times in 2011.

[Ana Swanson]

At one point, Trump is asked by the LA Times, what are some of your favorite books on China?

[Peter Navarro]

And he proceeded to do something I'm not sure I could even do. He listed his top 10 books by title and authority, and I was number six, the Comey China Wars.

[Ana Swanson]

And he mentions one of Peter Navarro's books. So they start corresponding and one thing led to another. And ultimately then candidate Trump decides to bring Navarro onto his campaign.

[Peter Navarro]

What I try to do is see problems and solve them. And the problem I saw crystal clear is the unfair trade that was driving up these large trade deficits and shutting down our factories and creating just all sorts of misery for blue collar workers.

[Ana Swanson]

One of the Trump wins the presidency and Navarro is given a job in the administration working on trade policy. But he's still kind of an outsider. There are a lot of other more influential advisors in the administration at that point who are opponents opposed to the idea of imposing broad tariffs on foreign products. And so you come to a point where most of the other advisors are saying to President Trump, we can't do that. We shouldn't impose tariffs.

[Peter Navarro]

It was always the same, like Mnuchin and Cohn and then Kudlow and all these people, they just didn't buy in. And the defining moment for me, in terms of when I finally was able to begin doing what the President wanted me to do, it was about four months in and he made the famous where's my Peter? Call. It's like he's sitting around with these guys four months in, nothing's happening at all. And he goes, where's my Peter? Go over there. And I have this like, battle with cone and whatever. And then some months later, I'm able with Wilbur Ross to get the steel and aluminum tariffs in. And Cohn leaves like a crying little baby in a huff.

[Ana Swanson]

And Navarro prevails and he helps to draft tariffs on China and on steel and aluminum from countries around the world.

[Rachel Abrams]

So when Trump and Navarro leave office in 2021, what exactly had they accomplished in terms of the trade relationship with China?

[Ana Swanson]

So they had really changed the American terms of trade with the rest of the world. They had imposed a lot of tariffs on things like metals and washing machines and over $300 billion of products coming in from China. And they had also signed a trade deal with China and reworked the North American Free Trade Agreement into a new deal. But then there's an interesting wrinkle to the story. So Trump's orbit has changed a lot through the whole first new advisors have come in, they get fired. You know, people are in and out very quickly. But Peter Navarro, even though he's sometimes sidelined, is there the whole time. And when the January 6th hearing comes, Navarro is called to testify and he shows his loyalty to Trump by refusing to hand over his notes. And then he is sent to prison for four months for failing to honor the subpoena.

[Peter Navarro]

So just to clarify, I went to prison not because I didn't want to cooperate with an investigation, but because it was my duty as a senior White House official to refuse to appear when issued an unlawful congressional subpoena. That case is being litigated. It was unfortunate they put me in prison until. They should have waited until my appeal ran its course. But I want to be really clear about why I went to prison. I was defending the Constitution. Now to your point.

[Ana Swanson]

And he gets out of prison on the day of the Republican National Convention, and he flies directly from prison to the RNC to give a speech.

[Peter Navarro]

Yes, indeed. This morning I did walk out of a federal prison in Miami. Joe Biden and his Department of Injustice put me there.

[Rachel Abrams]

Wow, that is quite an image. And we know what happens next. Trump, who is somebody who obviously prizes loyalty very much, wins the election, returns to office, and he brings Peter Navarro back with him.

[Ana Swanson]

That's right. And this time he is even more empowered to totally transform America's trade relationships.

[Rachel Abrams]

We'll be right back.

[Ana Swanson]

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[Carlos Prieto]

My name is Carlos Prieto, and I'm one of the people that helped make the Daily. As part of our reporting on immigration, we heard from this woman crossing one of the most dangerous stretches of land on the whole planet to get to the United States. I knew that she was from Venezuela, which is where I'm also from, but what I found out is that not only was she from the same city that I grew up in, but she was also from the same neighborhood. She was describing parks and plazas and streets where I spent a lot of my childhood. She was a woman that I might have encountered at some point in my life. It made me feel an extra responsibility to find a way for our listeners to feel like they understood her and her story. What makes the Daily Special is that we try to understand every story with that level of closeness so that our listeners can really connect with the humans in the middle of a news event. If this is the kind of journalism that you like and that you care about, the best way to support it is by subscribing to the New York Times.

[Peter Navarro]

So from the review of my book, there's been a steady evolution of thought amongst the public, even on Wall street, about what I've been saying, what the president has been saying, what others in our camp have been saying, and I guess I'm mainstream now. That's scary.

[Rachel Abrams]

So, Ana, now that we understand how Peter Navarro formed his worldview about trade with China, let's talk about his tools for bringing back manufacturing jobs to the US and those tools are tariffs. Tell us about how Navarro makes the case for tariffs.

[Ana Swanson]

So Peter Navarro believes that tariffs are a very important tool to balance out America's trading relationships that, as we talked about, countries like China have been cheating international rules by making products more cheaply than they should and stealing intellectual property. And basically they're putting out goods that American businesses just can't compete with. And so American businesses need kind of a shield from those products. And that shield is tariffs.

[Rachel Abrams]

How exactly is it a shield?

[Ana Swanson]

Well, a tariff is a charge on a good when it comes over the border. So if companies are making their products outside the United States and they want to sell them inside the United States, they pay that extra fee. So the thinking is tariffs will incentivize companies to make their products inside the United States so they don't have to pay that fee.

[Rachel Abrams]

But what does Navarro say about the criticisms that are often cited of using tariffs? Like Trump himself has acknowledged on social media that tariffs could lead to higher prices, for example, for consumers and in the U.S. just to point out, we just went through a period of super high inflation, and that was really, really painful for people.

[Ana Swanson]

So I asked him about that, and he was pretty clear about his position.

[Peter Navarro]

Tariffs do not cause inflation when they're imposed by the largest market in the world. And that has been demonstrated by the fact that we aggressively impose tariffs. During the first term, we had zero inflation.

[Ana Swanson]

As a result, he said that tariffs will not hurt consumers. So I did want to Push back on some of the economics of tariffs and also get your response. So, you know, first, there were quite a few studies that showed that American consumers did bear the brunt of the China tariffs, that much of that cost was passed through. But then secondly, even more basically, I.

[Peter Navarro]

Mean, stay with that. Okay, let's do this. Okay, so who are the studies by?

[Ana Swanson]

You know, a lot of very prominent economists, New York, Fed, but other academic economists as well.

[Peter Navarro]

All the ones that were wrong about Trump. You know, I like the ones that.

[Ana Swanson]

You don't believe in and that you kind of felt.

[Peter Navarro]

But I think it's fair, Ana, for you to go back and look at those analyses, who said it, and then look what they said, for example, when Trump came into office and how they predicted there would be chaos, recession, inflation, stagnation. That has never happened. I think my point here is that the academic community can't be trusted to critique Trump economics. And they have a credibility problem because they've been crying this wolf. They did it all through the first term. None of that happened. They're just wrong. We're right, they're wrong, End of story.

[Ana Swanson]

And you feel that the American people are on your side of that assessment, that economists don't know what they're talking about.

[Peter Navarro]

It's the American people who've borne the brunt of this for going on, what, 40 years now. How many times do you have to be told by politicians and corporate flacks that this free trade stuff's good for you and then you lose your job and your community falls down around you for you to stop believing them? I mean, it did. You know, that's why Trump got elected.

[Ana Swanson]

In 2016, setting economists and think tanks aside. I mean, even sort of common sense, right? So tariffs work by raising the price of foreign goods. And when the price of foreign goods go up, you know, that is what encourages people to buy domestic goods. I mean, isn't that the way that tariffs.

[Peter Navarro]

All right, let's walk through that. Okay, There is a rhyme to the reason why we did this.

[Ana Swanson]

I asked him this question a couple of times. Aren't tariffs supposed to increase prices? Because that's how tariffs work. They make the foreign good more expensive, so people buy American goods instead. But Navarro didn't really give me a direct answer.

[Peter Navarro]

Here's the thing. We are the biggest market in the world, which gives us buying power. Okay? So particularly export dependent economies, the Chinas of this world, who heavily rely on Americans buying their products. If that becomes more difficult to do, what's the first thing these countries are going to do in response to tariffs? What are they going to do? We slap a tariff on. What are the producers over there going to do? What are they going to do? Tell me, what'd they do? You're a producer over there, and suddenly, suddenly tariffs are up and you got to compete with an American producer. What are you going to do?

[Ana Swanson]

So your assumption is that they would lower their prices.

[Peter Navarro]

That's exactly what they do. It's not an assumption. That's just a fact.

[Ana Swanson]

Instead, he talked about how Chinese companies would absorb some of the cost of the tariffs to keep prices low. Your goal is to help US Factories, but a lot of US Factories do buy components and parts from abroad. And, you know, I've talked to a lot of manufacturers who say that would raise their costs. It would make them harder. Harder for them to make things. Does that kind of backfire on your agenda?

[Peter Navarro]

So here's one of the iron laws of manufacturing. If manufacturing goes abroad, the supply chains follow, and vice versa. Okay.

[Ana Swanson]

So I also asked him about US Manufacturers who are buying parts from abroad and whether tariffs would hurt their business. And he didn't seem all that concerned with what I've been hearing from some American manufacturers. He just kept coming back to the idea that ultimately tariffs will incentivize both American and foreign companies to build factories in the US you're going to have.

[Peter Navarro]

A domestic investment come quickly when we.

[Ana Swanson]

Did the steel, which he believes will then lead to higher wages for Americans.

[Peter Navarro]

You see wages go up, and that gives consumers more spending power and offsets any rise in prices. If real wages rise faster than any other types of inflation, people are still better off.

[Ana Swanson]

And he said these tariffs aren't happening in a vacuum.

[Peter Navarro]

When I was a campaign advisor in 2016, I had a mantra. It was tax cuts, deregulation, strategic energy dominance, fair trade. Those were the four components, the tires on the car towards economic prosperity.

[Ana Swanson]

He argues that if the Trump administration is able to get the price of oil down, if Elon Musk and his team are able to cut government waste and red tape, and if Trump keeps taxes low, all of these moves together would reduce inflation and help the US Economy.

[Peter Navarro]

Because one of the most important things that we're trying to accomplish, that President Trump is trying to accomplish, is more stable and resilient supply chains, which we have learned to be an enormous problem in the wake of the pandemic. So that's a major national security and economic security risk.

[Ana Swanson]

But what Navarro said is the most important part of all of this, why he's so focused on tariffs and bringing manufacturing back to the United States is that it all comes back to national security.

[Peter Navarro]

We get screwed by everyone. And we could afford it in the 1950s. We can't afford it. And that's the thing the rest of the world needs to understand. It's like when they want to come to Uncle Sam for support for democracy. If we don't have a manufacturing and a defense industrial base because it all got exported because people are cheating us on trade, we're not going to be there. And that's why in the first term, when President Trump said economic security is national security, it was a very important message and foundation for the way we here in Trumpland think about things.

[Rachel Abrams]

The sense I'm getting from talking to you about your conversation with Navarro is that we're talking about these really aggressive, audacious policy tools. And in fact, you know, in some form or fashion, the US has been using them for the past few years. They obviously started in the first Trump administration. But what's coming through is that it doesn't sound like Navarro is actually grappling with what you're describing as the potential negative consequences of these tariffs.

[Ana Swanson]

I don't think that he believes in those negative consequences. No, he doesn't believe in what most experts are are saying, which is that all of these tariffs could end up really hurting Americans.

[Peter Navarro]

It's not going to be painful for America. It's going to be a beautiful thing. President Donald John Trump has proven that tariffs work for the American people, and they're going to be even more, much more important this second term. This is all set in motion now, Ana, so stay tuned.

[Ana Swanson]

So that order will, you know, he and the president are embarking on imposing tariffs at just a vastly bigger scale than we've seen in this country in many decades. And so it is kind of like a grand experiment, really, to see if they're right about how tariffs will play out for the American economy.

[Rachel Abrams]

Well, Anna, thank you very much.

[Ana Swanson]

Thanks for having me.

[Rachel Abrams]

We'll be right back.

[Carlos Prieto]

If you find yourself bewildered by this moment where there's so much reason for despair and so much reason to hope all at the same time, let me say I hear you. I'm Ezra Klein from New York Times Opinion, host of the Ezra Klein Show. And for me, the best way to beat back that bewildered feeling is to talk it out with the people who have ideas and frameworks for making sense of it. There is going to be plenty to talk about. You can find the Ezra Klein show wherever you get your podcasts.

[Rachel Abrams]

Here's what else you need to know Today, four top New York City officials are resigning after the Justice Department moved to dismiss the corruption case against Mayor Eric Adams. The four officials oversee much of the city government, and their departure could further weaken Adams, who's resisting calls to resign. Adams was indicted on federal bribery and fraud charges, which the DOJ sought to dismiss, arguing that the prosecution was politically motivated and was impeding Adams ability to cooperate with President Trump's deportation agenda. And on Monday, a Delta Air lines flight carrying 80 people crashed, flipped over and injured at least 18 people on board while it was trying to land in Toronto. The accident comes after a series of plane crashes over the last few weeks have stoked fears in passengers and raised broader concerns about aviation safety. Today's episode was produced by Mary Wilson and Michael Simon Johnson. It was edited by Lisa Chow and Larissa Anderson. Fact Checked by Susan Lee contains original Music by Pat McCusker, Diane Wong, Marion Lozano and Dan Powell and was engineered by Chris Wood. Our theme music is by Jim Brunberg and Ben Landsberg of Wonderly. That's it for the Daily I'm Rachel Abrams. See you tomorrow.