Too much trade rhetoric from White House, not enough practical experience: Former Bush advisor

FAN Editor

The U.S.-China trade conflict is now in the “escalation phase,” yet there is not a White House team that has practical experience in China, warned John Rutledge, a former advisor to President George W. Bush.

“We don’t have a team here of people who have spent any time in China. When I want to know if a guy knows something about China I look in his passport and count the stamps,” Rutledge said Wednesday on “Closing Bell.”

“We’ve got too much rhetoric, too much ideology and not enough practical. Trade’s very complicated,” he added.

Earlier Wednesday, China announced additional tariffs on 106 U.S. products, such as soybeans, cars and whiskey. They are designed to target up to $50 billion of U.S. products annually, although no effective start date has been announced.

The move came less than 24 hours after President Donald Trump unveiled a list of Chinese imports that he aims to target as part of a crackdown on what he deems to be unfair trade practices.

The Trump administration alleges that China has improperly taken U.S. intellectual property.

While there is increased concern over the possibility of a trade war between the two countries, the president said in a tweet Wednesday that the U.S. already lost that war many years ago.

He also doubled down on the trade deficit in a later tweet.

However, Rutledge, who has advised government leaders in China and was one of the principal architects of the Reagan economic plan, said focusing on the deficit simplifies the issue.

“What we should do is take a more complex view on trade than just talking about this deficit. This deficit just measures stuff on boats,” said Rutledge, now chief investment officer at Safanad and a CNBC economics contributor.

He also said that right now for a CEO or investor it doesn’t make sense to approve spending projects.

“I have $10 billion of assets in our portfolio, and we can’t do capital spending with this kind of uncertainty around,” he said.

Ambassador Robert Holleyman, who served as deputy U.S. trade representative from 2014 to 2017, said the latest tariffs on China have little to do with intellectual property. He thinks it is mostly about China’s plan to build a technology economy.

“This is not a broad attack on China for the trade deficit, although there is a substantial trade deficit. This is quite precise,” he said on “Closing Bell.”

“But the U.S. hasn’t said what China will and needs to do for us to avoid these tariffs going into place and becoming the new norm. And that I think is the worry for the U.S. long term.”

— CNBC’s Sam Meredith contributed to this report.

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