World Economy

Peter Navarro, who wrote 'Death by China,' may have won the battle against pro-trade voices

Key Points
  • White House National Trade Council Director Peter Navarro, who wrote a book called "Death by China", may have gained the upper hand in a debate with pro-trade voices.
  • "I think we are likely to see more surgical, and specific American trade measures or tariffs against Chinese goods," Jonathan Pain, author of the Pain Report, told CNBC.
Trump has just thrown a 'very large spanner into the global economic engine'

President Donald Trump's trade advisor Peter Navarro, a fierce China critic who has clashed with more pro-trade voices in the White House, may have gained an upper hand in that debate.

That's according to Jonathan Pain, author of the Pain Report, who told CNBC on "Street Signs" that this development is likely to have an impact soon. Navarro is director of the White House National Trade Council.

"I think we are likely to see more surgical, and specific American trade measures or tariffs against Chinese goods," he predicted.

"Because don't forget, Peter Navarro is the author of the book, Death By China ... so we know how he thinks. And his mindset and his opinion appears to have won the battle within the white house. It is very important that we understand the ramifications of that," he added.

Noting that Navarro and U.S Trade Representative Robert Lighthizer have been "working feverishly" on a battle plan for Trump, he said: "We now know that they have basically won the battle within the White House ... I think this marks a really interesting new chapter in the presidential term."

National Trade Council adviser Peter Navarro speaks during an executive order signing ceremony regarding trade in the Oval Office of the White House in Washington, DC on Friday, March. 31, 2017.
Jabin Botsford | The Washington Post | Getty Images

Pain also said he believes U.S. President Donald Trump's seemingly positive relationship with Chinese President Xi Jinping after their first meeting last year was based on U.S.' needs at that time.

"That was purely transactional in nature, because the big transaction at that moment in time was — all roads lead to Beijing — and America needed China to help restrain and contain Pyongyang," Pain said, referring to issues surrounding North Korea.

Pain, who is also a director of JP Consulting NSW, a health consulting and contracting firm, also said that after delivering on his campaign pledges, Trump is now turning his attention to matters involving foreign affairs.

"On the campaign trail he kept talking about America first, and he's delivered on his tax cuts and also deregulation," Pain said. "Once he had got those in the bag, he then decided to turn his attention from domestic matters to foreign affairs."

Pain, who felt that Trump's "real core instinct" is that the trade deficit is "everyone else's fault," also said that the tax cuts and impending tariffs has injected a sense of uncertainty into the market.

"There is a concern now that we are going to get a series of tit-for-tat retaliatory measures, so that sense of uncertainty about what happens next injects a high risk premium into the risk markets, namely, equities," the author said.