“The Wall Street Journal will write what it writes. It doesn’t sound a lot different from the People’s Daily in terms of the news that it puts out," Navarro said in an interview on Fox Business Network’s “Mornings with Maria.”
People’s Daily, the largest newspaper in China, is an official outlet of the Chinese Communist Party. The Wall Street Journal is owned by businessman Rupert Murdoch and his family, and the paper’s editorial board is widely considered a leading Republican and capitalist voice.
The Wall Street Journal’s Thursday editorial, headlined “A Navarro Recession?,” cautioned that Trump’s escalating trade battle with China is backfiring by causing businesses to stop investment and reduce hiring. The editorial blamed Navarro for giving the president poor advice.
“Mr. Trump’s willy-nilly trade offensive could be the mistake that turns a slowdown into the Navarro recession,” the editorial board wrote.
Navarro dismissed the editorial as biased and wrong when he was asked about it on Fox Business. He insisted the U.S. economy is doing well and blamed Congress and the Federal Reserve for the fact that hiring has slowed from an average of 223,000 a month last year to 165,000 this year and that business investment dried up in the second quarter.
“This economy is solid as a rock,” Navarro said. “But President Trump doesn’t want a very good economy, he wants a great economy.”
A spokesperson for the Wall Street Journal declined to comment.
Navarro said he went on television the day after the election and said the Dow would hit 25,000 in Trump’s first term — which did happen. The Dow is currently sitting at about 26,375. It shot up after Trump’s election and during his first year in office as the president’s regulatory rollback got underway and Republicans enacted the largest corporate tax cut in U.S. history.
But the stock market has mostly gone sideways since Trump starting putting tariffs on various items and countries in January 2018. Business leaders and the Wall Street Journal editorial board say the trade war is harming the economy. But Navarro insisted that all blame falls on the Fed, even though Trump appointed the Fed chair and most of its board of governors.
Navarro predicted that the Fed would reduce interest rates three or four more times by the end of the year, an unprecedented amount of aid at a time when the economy is doing pretty well.
“I believe that by the end of the year, we’ll have 75 to 100 basis points cuts, not because this economy is weak, but because of this spread problem,” Navarro said, referring to the difference between the Fed’s 2.25 percent benchmark interest rate and the 1.72 percent yield on 10-year Treasury bonds.
Hope of a quick resolution to the U.S.-China trade war has faded in the past week as both sides have dug in further. At Navarro’s urging, Trump said he will put 10 percent tariffs on an additional $300 billion worth of Chinese imports. China responded by devaluing its currency, a move Trump detests, although it does help alleviate the costs of the tariffs.