Tariff Escalation Won’t Cause Inflation; Foreigners Will ‘Eat Most Of It’: Trump Trade Counselor

Peter Navarro, who is the White House senior counselor for trade and manufacturing, defended President Donald Trump’s plans for implementing tariffs on imports ahead of what is anticipated to be a major escalation in the trade war next week.

Trump, who has already issued some tariffs during his second term, has declared that April 2 will be “Liberation Day” featuring a wave of new reciprocal tariffs followed by a 25% tariff on automotive imports to the United States on April 3.

Polls have shown that Americans fear the tariffs on imports will hurt the U.S. economy and jobs, but during an interview on “Fox News Sunday,” Navarro urged people to “trust in Trump” as he harkened back to the “example” set during the president’s first term.

.@RealPNavarro: "We have the example from the first term. We know that we imposed historically high tariffs… and all we got out of that was prosperity and price stability… the Germans, the Japanese, the South Koreans and the Mexicans have taken our manufacturing capability.… pic.twitter.com/1nII1TVKHF

— Rapid Response 47 (@RapidResponse47) March 30, 2025

“We know that we imposed historically high tariffs on China. We imposed aluminum and steel tariffs. We imposed on washing machines, on solar, and all we got out of that, Shannon — all we got out of that was prosperity and price stability,” Navarro told anchor Shannon Bream.

“And the reason why we’re not going to see inflation is because the foreigners are going to eat most of it. They have to; we’re the biggest market in the world, Shannon,” he added. “And they have to be here. They have to be here. And so they’re going to cut their prices to absorb that.”

Navarro said the “bigger picture here is restoring the American manufacturing base,” adding, “We don’t have that. We’re an assembly thing.”

Looking back to the 1940s, Navarro said there was “something called the ‘arsenal of democracy’ back in World War II. That was how we beat the Japanese and the Germans with our military might.”

“When General George S. Patton “went to Berlin, it was with trucks, Jeeps, and tanks that were made in the auto plants of the Midwest,” Navarro continued. “Right now, the only thing that looks like the Midwest back then is Mexico. You go across the diaspora of cities in Mexico, there’s football-field-sized — 50 football field-sized assembly plants that are down there making the engines for here. We can’t do that.”