The White House economic team faces its most daunting challenge yet as President Trump’s trade fights fuel fears of a global recession and threaten his reelection prospects.
The president’s trade battles with China, Europe and the Democratic-controlled House are seen as further restraining an already slowing global economy. On the China front, Trump has slapped more than $300 billion in tariffs on Chinese goods as part of a dispute that began July 1, 2018.
{mosads}Trump will soon face difficult choices over whether to protect U.S. businesses and consumers by ratcheting down the dispute, or push through potential turmoil in an effort to secure major concessions from China.
He will also need to revisit delayed auto tariffs on Japan and the European Union — two major U.S. trading partners — and decide whether to make a final push for congressional approval of a revised North American Free Trade Agreement (NAFTA).
Here are five U.S. officials shaping those decisions.
Treasury Secretary Steven Mnuchin
In a Cabinet with an uncharacteristically high turnover rate, Mnuchin has endured as Trump’s loyal lieutenant on a slew of economic issues.
Mnuchin earned Trump’s trust as a point man on trade talks by pushing a hard line with China despite his private pushback to the president’s trade policy. While Mnuchin is more inclined toward the typical GOP support for free trade, he has fiercely defended the president’s tariffs. He also yielded to pressure from Trump to label China a currency manipulator this month.
Trump is under immense political pressure to strike some sort of deal with China to ease the trade war before the 2020 election. The success of those talks will largely depend on Mnuchin’s ability to lay the groundwork for an agreement that gives both sides room to declare victory.
White House trade adviser Peter Navarro
Navarro is one of the chief architects and advocates of Trump’s trade policy, encouraging the president’s protectionist impulses and his staunch anti-China, pro-tariff platform.
{mossecondads}Navarro, once an esteemed energy economist, has drawn scorn from across the political and economic spectrum for his views on trade and his very public support for economic nationalism. He was quickly embraced by Trump as a campaign adviser and later joined the White House, over objections from the president’s more conventional Republican aides.
Navarro and Trump are in sync on trade and his influence in the White House has risen in lockstep with trade tensions. While Trump may be the driving force behind the trade war, Navarro has emerged as a prime target for critics of the president’s trade agenda.
U.S. Trade Representative Robert Lighthizer
Securing congressional approval for a new NAFTA is one of Trump’s top legislative priorities, with major stakes for the world economy. The president has threatened to pull out of the current NAFTA, implemented in 1994, if the new trade pact isn’t approved. Economists say such a withdrawal would reverberate beyond North America.
Trump’s top trade negotiator for the new NAFTA is one of very few administration officials who have established a solid rapport with congressional Democrats, including Speaker Nancy Pelosi (D-Calif.).
Democrats have praised Lighthizer for his honesty and transparency in tense negotiations over the NAFTA rewrite, but Pelosi and top Democrats have yet to strike a deal with Lighthizer, citing labor and environmental provisions as the reason for the holdup.
Whether House Democrats decide to take up the new agreement largely depends on Lighthizer’s ability to cement their desired changes and overcome fears that congressional approval of the pact could bolster Trump’s reelection odds.
National Economic Council Director Larry Kudlow
Kudlow has emerged as Trump’s chief economic spokesman amid rising skepticism of the president’s economic policies. The former CNBC host is frequently heard touting Trump’s policies, and he’s often the White House official dispatched to soothe financial markets when stocks begin to slide.
As anxiety rises about Trump’s role in any global slowdown, Kudlow will be tasked with appeasing critics and jumpy traders who could compound the political harm of a stock downturn for the president.
On Sunday, he took his message to “Fox News Sunday” and insisted that “there is no recession on the horizon.”
Kudlow also indicated there are no plans to change course.
“The Trump pro-growth program, which I believe has been succeeding, we’re going to stay with that,” Kudlow said.
Federal Reserve Chairman Jerome Powell
Trump spent more than a year blaming Powell and the Fed for restraining the U.S. economy, even as growth was accelerating and unemployment was falling to near-record lows. The president has long pressured Powell, his hand-picked chairman, to cut interest rates, a move that would likely stimulate the economy and aid Trump’s trade battles with China and the European Union.
Powell has brushed off Trump’s pressure, though the Fed did cut rates in July in what the chairman called a hedge against further trade tensions. Trump responded by bashing the Fed for not taking a more aggressive stance toward slashing rates. In recent weeks, his attacks have only intensified.
Trump’s attempts to influence the Fed have unnerved financial markets and economists, who fear the president’s attacks could tarnish the central bank’s credibility during a financial crisis.