He said the U.S. economy faced a “China shock” that could eclipse what it experienced in the early 2000s, after China’s entry into the World Trade Organization. Mr. Navarro points to the research of David H. Autor, a Massachusetts Institute of Technology economist whose 2017 paper found a relationship between the surge of Chinese exports to the United States two decades ago with lost American manufacturing jobs and a variety of grim health outcomes.
“The unfair China trade shock that hit so many of America’s communities in the 2000s not only destroyed over five million manufacturing jobs and 70,000 factories; it killed tens of thousands of Americans,” Mr. Navarro said.
“As numerous academic studies have documented, economic shocks like China’s trade shock can increase mortality rates associated with suicide, drug overdoses, alcohol poisoning, liver disease, lung cancer, poor diet and cigarettes,” he said, “while destroying families through higher rates of single-parent households, child poverty, and divorce and lower rates of fertility and marriage.”
The virus has already inflicted severe damage to both the U.S. and global economy. Goldman Sachs economists project that the unemployment rate could hit 15 percent by midyear, and that the economy will contract by 34 percent in the second quarter. The sluggish initial response from the United States could prove advantageous for China, which took swift and draconian measures to contain the virus after it emerged in Wuhan last year, potentially allowing the Chinese economy to rebound more quickly.
While scientists continue to work on a vaccine, Mr. Navarro said the economy could still reopen without one. Expansive testing for the virus, as well as testing for antibodies that indicate who might have immunity and can return to work, will be key to reopening the economy, he said.
Despite the development of new rapid tests, the ability to conduct nationwide testing for the virus or for antibodies and the ability to conduct large-scale contact tracing remains a longer-term goal.
Mr. Trump’s advisers have been targeting early May for a gradual reopening of the economy that would focus on regions where the virus is less concentrated and could ramp up as testing capacity increases. However, reopening the economy too soon poses other unpredictable risks. If a second wave of the virus occurs, the economy would most likely have to be shuttered again, meaning even more severe economic pain.