- Trump advisor Navarro headlines doing the rounds, who has taken issue with shelving of protections for IP and technology.
- Hardline approach from hawk Navarro is a risk that could disrupt trade deal negotiations.
Trump advisor Peter Navarro has taken issue with shelving of protections for IP and technology that appeared in earlier versions of ‘phase one’ of the China trade deal, as reported by CNBC, citing sources.
The report highlights the hardline approach from hawk Navarro and which has the potential to disrupt trade-deal progress. The news follows yesterday’s headlines as details of the so-called Phase-1 deal have started to surface whereby an initial pact on the U.S-China trade would include much of a scrapped May deal’s agreement regarding intellectual property and will target enforcement mechanisms – Peter Navarro said on Thursday, and he hopes the Chinese negotiate in “good faith.”
“The good news about this phase one … is it adopted virtually the entire chapter in the deal last May that they reneged on for IP,” Navarro told Fox Business Network in an interview. “Practically it means, if they steal our IP we’ll be able to take retaliatory action without them retaliating.”
Todays CNBC report stated that “just days before Pres. Trump announced the Phase One deal, Navarro suggested on NPR’s “Morning Edition” that such a partial deal was not a possibility.”
Further key quotes from the report:
- Trade hawk Peter Navarro has been fighting the deal behind the scenes.
- Navarro has urged Trump to force China to recommit to previous promises on IP protection or walk away from a deal.
- So far, Navarro’s effort has been unsuccessful. “He’s been agitating to drive a harder line” since the partial deal was announced, said one former administration official. “But he’s alone on this one.”
- On Friday, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin continued talks in a principal-level call with Chinese vice premier Liu He. “They made headway on specific issues and the two sides are close to finalizing some sections of the agreement,” according to a readout provided by USTR. “Discussions will go on continuously at the deputy level, and the principals will have another call in the near future.”
Asked for comment about his opposition to the Phase One deal, Navarro provided the below comment by e-mail to CNBC:
“This is just more hearsay fake news from anonymous fake sources intent on disrupting the negotiations. There are no people ‘close to the talks’ within any real information — Ambassador Lighthizer runs the tightest ship in the D.C. Swamp and his folks aren’t talking to the outside.”
FX implications:
So far, this story has not gained much traction as we head into month-end as well as the end of the week. It has the potential, however, to disrupt next week’s open but considering Navarro appears to be alone on this one, and that it should come as no surprise considering his nature and track record. We should not be surprised to come across many more bumps in the road, which indeed will support currencies such as the Yen, Gold and weigh on the Yuan and Australian Dollar.
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