In this episode of Yahoo Finance Presents White House Director of Trade and Manufacturing Policy Peter Navarro, talks to Yahoo Finance editor-in-chief Andy Serwer about the ongoing coronavirus pandemic, the China Trade Deal, and Federal Reserve Chairman Jerome Powell's latest comments about the U.S. economy.

Video Transcript

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ANDY SERWER: All right, I'm here with Peter Navarro, the White House Director of Trade and Manufacturing Policy. Peter, thanks so much for taking the time to speak with us.

PETER NAVARRRO: Nice to be with you this morning, Andy.

ANDY SERWER: You recently laid out how China has been using the coronavirus crisis to its own advantage, and I'm wondering how you see their behavior evolving over the years during the Trump administration. Is this worse than back when you were talking about the seven deadly sins?

PETER NAVARRRO: Let's take a little historical look at what we're dealing with, Andy, with communist China here. OK, historical context going back to 1962 and before that is that what China likes to do is use crises to advance its strategic and territorial agendas. So in 1962 during the Cuban Missile Crisis, China invaded India.

India was outgunned, outmanned, and they couldn't send out the SOS to either the Soviet Union, which was a big ally of theirs at the time, or the Americans. And as a result, communist China was able to seize Aksai Chin in India, a portion of Aksai Chin, and basically achieve its territorial objectives.

What China is doing now behind the cover of the China virus pandemic is a wide range of activities. You've got another border war with India. China has invaded India once again. You've got the ongoing suppression of the Uyghurs, who are in concentration camps, up to 2 million of them. You've got the ongoing cultural genocide that's going on in Tibet. You've got China-- 30 years before the treaty said they should-- is snuffing out democracy in Hong Kong.

In the South China Sea, they're doing things like sinking Vietnamese trawlers in order to assert what's called the nine-dash-line in the South China Sea, which basically claims the entire South China Sea as a China lake. And it's important because a large portion of maritime commerce for the world goes through that South China Sea.

Here in the US behind the cover of the chaos of the pandemic, they are trying to steal the intellectual property associated with vaccine development so that they can hold the strategic high ground there, which would be very dangerous. And there's some irony there, Andy, because we signed a phase one deal, which was supposed to stop intellectual property theft. And as soon as the ink was dry, they foisted the pandemic on the world, and now they're trying to steal the vaccine.

And the worst thing about this is that this virus, this China virus that they spawned and hid, has really hit our major metropolitan areas like ICBMs at the two pillars of urban life-- our major metropolitan areas. What is that density? In mass transit.

And so this is kind of what we're grappling with. And I think China-- to use an American expression-- is very much feeling their oats right now. They're using disinformation campaigns-- we are in an information warfare with China-- to basically propagate the message that the authoritarian repression of China is better economically and is a better system to deal a pandemic they created, mind you.

ANDY SERWER: Peter, are you saying-- sorry to interrupt, Peter, but are you saying that they intentionally used the coronavirus as a weapon on the United States?

PETER NAVARRRO: I'm not saying that. What I'm saying is what they're doing now is leveraging the fact that this virus, which they did unleash upon America and the rest of the world-- the fact that this virus is creating economic upheaval in this country is something that China is willfully and willingly exploiting. And you can debate about whether this was a genetically engineered virus, whether it was an accident from the lab, or whether they put it out.

But what we do know, Andy, is this. This is incontrovertible. While China was prohibiting domestic travel from Wuhan to the rest of China around the country, they willfully sent hundreds of thousands of Chinese nationals on planes to seed and spread that around the world. Was that an intentional act? We can't say that. But what we can say is that, the fact of the matter is, that was the result.

ANDY SERWER: Right.

PETER NAVARRRO: China is exploiting this crisis. This much we know. And it's an information warfare. It's also an economic warfare.

ANDY SERWER: Let me ask you-- your concerned about intellectual properties point. And I'm wondering, does that mean you're thinking about scrapping phase one altogether at this point because of those violations that you're talking about?

PETER NAVARRRO: We fully expect China to uphold its commitment to phase one. At the same time, I'm simply pointing out the extreme irony of a situation where China signed a deal on January 15 to stop stealing our intellectual property. And even as we speak, government officials from China are trying to hack our computers to steal the intellectual property associated with things like vaccine development and therapeutics. And if the fact checkers want to be out there, go for it. Just look at the FBI circulars that have been posted warning of this kind of cyber attacks.

So that's what's going on here. And I think it's important for the American people to see this with clear eyes, particularly as we're moving in to an election on November 3 in which people are going to have a very clear choice between Joe Biden, who for the last 30 years or more has been a client of China and helped oversee the export of our manufacturing jobs. Never said a word about intellectual property, theft, forced technology transfer, sweatshop labor, or pollution havens, or currency manipulation. This is not in Joe Biden's wheelhouse.

Versus Donald J. Trump, who in 3 and 1/2 years has transformed entirely the dialogue about China. He's the only president ever to stand up to China. And I think we definitely seeing that seismic shift in the polls. The Pew Research Poll, I think, is the gold standard here.

Over 90% of Americans now see China as a threat. 71% have a bad impression of China. And they're concerned about everything from jobs and rising Chinese military to all the human rights violations in China.

ANDY SERWER: But, Peter--

PETER NAVARRRO: The question is whether those public attitudes-- this is a key one, Andy-- whether those translate into political action. I'd love to see a sign that says "China lied. 100,000 Americans died." And I think going into November 3, this is going to be one of the two most important issues. It's going to be the economy. It's going to be on China.

ANDY SERWER: Let me ask you-- people say that you and the president use China, you're scapegoating China, number one. I'd like you to respond to that. And number two, I mean, aren't we going to have to work with China for the rest of our lives in some form or another, particularly, for instance, to get vaccines? Two questions there.

PETER NAVARRRO: Well, look, how do you work with a country that lies through its teeth? I mean, that's the bottom line. The culture of communist China is not truth. It's propaganda.

In the Chinese culture-- this is what's so interesting about the cultural differences between the two countries that really led so many Western politicians astray. It's perfectly acceptable in communist China to spread propaganda that is in direct contradiction to the truth if that advances the communist party's agenda. Full stop. So if that's true, how do you deal with a country that's really never honored a single deal it's never signed?

I mean, let's remember, just right over there-- the Rose Garden's just right over there. 2015, Xi Jinping came into the Rose Garden and shook Barack Obama's hand on a deal that said we will not militarize the South China Sea, and we'll stop hacking your computers.

Well, guess what? Five years later, the South China Sea, it looks like a war zone. It's completely militarized. And guess what? They continue to steal our intellectual property.

So I don't-- I don't-- I don't even know how you work with China on a vaccine. They refuse to give us--

ANDY SERWER: Peter--

PETER NAVARRRO: Hang on. This is important. People need to understand this. They refused to give us early on the genetic material of the original virus. We still don't know what that looks like. So how do you develop a vaccine?

They did not allow any of our CDC personnel into China to study that early on, which would have helped understand what we were up against. It would lead to earlier action in terms of shutting out that virus. I mean, they've just been a bad actor.

ANDY SERWER: But how do you square--

PETER NAVARRRO: And then on top of that, they accuse us of us of creating the virus. Excuse me, Andy.

ANDY SERWER: Sorry. How do you square this rhetoric and your interpretation with the fact that you're trying to implement a trade deal, though, Peter? I mean, it sounds-- it doesn't make any sense to me. Why don't you just break off all relationships with them.

PETER NAVARRRO: Let me ask you this, Andy. Let me ask you this. Is this rhetoric, or is this fact that I'm saying? I'm challenging folks out there. Just go and check the facts that I'm putting on the table. China signed a deal in 2015. They didn't abide by it. China spawned the virus. China hid the virus.

ANDY SERWER: But why--

PETER NAVARRRO: So it's not--

ANDY SERWER: It doesn't sound--

PETER NAVARRRO: That's not mine--

ANDY SERWER: Should we have a breakup with them?

PETER NAVARRRO: That's not my-- that's my-- that's not my job here. In terms of the trade deal itself, we would love to see them honor that trade deal. That's why we went into good faith. I mean, let's be clear. The president has bent over backward in terms of trying to have a good faith negotiation with the Chinese. That is a historic deal. It's a great achievement.

But, yeah the big question, of course, is whether they're going to abide by it. And that's a work in progress. And I can assure you that if they don't abide by it, this president, Donald J. Trump, will make sure that the American people are protected from the People's Republic of China.

And these are the kind of debates we need to have in this election season. We've got less than 100 days, 150 days to November 3. And we've got Joe Biden who basically lived out of a post office box in Delaware, where multinational corporations sent our jobs freely offshore, many of them to China. By his travel logs in the White House, he was the most traveled vice president to China in American history by factors of two or three or more.

We know that during that period when he was vice president that we lost millions of manufacturing jobs to China. And it simply was never in Joe Biden's language or lingo to understand anything like sweatshops and pollution havens, which should have been in his wheelhouse because that's part of the democratic agenda. But currency-- you know, it's just-- this is the tragedy of our times. And I think this election really is going to define that issue.

Because, please, as you're watching this, please understand that the Chinese Communist Party is coming for our economy. They have coveted our technology. They've coveted our intellectual property. And they've taken our jobs.

This president has reversed that trend. But I'm telling you, we've got a long way to go, and the hits keep coming under the guise of this China virus that China has unleashed on us. They are using this chaos to try to destabilize further our economy and our society.

ANDY SERWER: Let me jump in.

PETER NAVARRRO: And they're doing this around the world.

ANDY SERWER: Yeah, let me jump in. Sorry to interrupt, Peter. Let me jump in and ask you about a vaccine. If it's green lit, are we going to be able to produce hundreds of millions of doses soon? Can we have access to the vaccine in a timely manner? And I want to ask you about manufacturing and making PPE and whether you feel that mobilization-- and you've been in charge of, I believe-- has been adequate. So vaccines and--

PETER NAVARRRO: Well, I think the best way to do that, to answer to that question is to show you the success that we've had in moving things in what I call Trump time, which to say is as soon as possible. I was up in Maine last week at Puritan in Guilford, Maine. And basically, they're ramping up under the auspices of the Defense Production Act to 60 million swabs a month in a factory that they're building in 60 days instead of a year. And that's a miracle in and of itself, a Trump miracle.

But in order to do that, the more sophisticated and subtle part of this was that they had to call on the help of General Dynamics to repurpose some of their factory space at the Bath Iron Works in Maine. And what General Dynamics is doing for Puritan is building 30 of the highly specialized machines Puritan needs to package the swabs. So with that miracle, jobs in Guilford, Pittsfield, Bangor, Brunswick, and Bath.

Another example was the factories we stood up in six weeks in Arizona and Rhode Island. Honeywell N95 mask production-- GM and Ventech. President Trump is the ventilator export king of the world in 100 days by GM and Ventech in Kokomo, Indiana standing up a factory in 17 days-- 17 days.

And so when you ask me if Operation Warp Speed is going to deliver the hundreds of millions of vaccine doses we're going to need, I say to you that what we've shown with all the other things this administration has been doing is that we have both the manufacturing capacity but also the brainpower to make all of that happen.

And, Andy, here's the important point. It's like, traditionally, when you do vaccine development, things happen in sequences. You do your clinical trials first, and then you move to the next trial. And then you start moving, the ramp up, and then you go to full production.

What Warp Speed is doing is instead of doing a sequence, they're doing these things simultaneously so that if, in fact, one of the five or six vaccine developers comes up with what we need, we will have already been able to produce that. And the worst thing that can happen if the vaccine doesn't work is we'll have too much capacity to produce it. But we won't be in a situation where we have too little. So that's where we're heading in vaccines.

We're working equally hard on therapeutics. We're all working equally hard on testing. And I think that it's a testament to this administration and the president that we're able so innovatively and flexibly to repurpose factories and redirect energy towards fighting the China virus.

ANDY SERWER: Right. Hey, Peter, stocks are down today because there are fears of cases spiking. How concerned are you about a second wave and what it would do to the economy?

PETER NAVARRRO: Andy, I think it's always dangerous when you see movement in the stock market to basically ascribe why stocks are going up or down. So let's not take the premise of that question. What I would say is that Jay Powell and his remarks yesterday-- he has, I think, probably the worst bedside manner of any Fed chairman in history. I think the best strategy for Jay Powell going forward would simply be to provide the data and let us know where interest rate's going and keep his mouth shut.

There's the old joke-- I'm a business-- old business professor. And the old joke in the marketing thing was if Jay Powell was going to market sushi, he'd sell it is cold, dead fish. He doesn't appear to understand that when you speak in negative ways, that has its own way of shaping sentiment and concerns. And so he's got to understand that going forward, he needs to speak about the economy in a way which provides the enthusiasm and optimism that's embodied in a president who understands how economies work.

I would say to you, sure, we've got really significant challenges ahead. But am I pessimistic? No, I'm optimistic because I know this president knows what we need to do. And what we need to do, Andy, is move forward with a manufacturing economy, where we bring our jobs here, and we prosper. And the more manufacturing jobs we make, the more service sector jobs we'll generate.

That's the kind of thing the Fed chairman should be talking about if he insists on opening his mouth. I mean, every time, every time in the last year he's come on the television to talk about whatever it is they've issued, the markets have not responded well. And it's interesting because the information will come out, and the markets will be fine. And then he gets up there and says sushi is cold, dead fish, and that's our Fed chairman.