Economic War

Steve Bannon: 'The economic war with China is everything'
By Tom Mitchell in Beijing

The US and China are engaged in an economic war from which there will be only one winner, Steve Bannon, the White House strategist, has warned in a stinging attack on Washington’s principal geopolitical rival.
In an impromptu and wide-ranging interview published online on Thursday morning Beijing time by The American Prospect, a left-leaning US magazine, Mr Bannon also said he was working to place anti-China hawks in key positions at the defence and state departments, and that there was “no military solution” to the North Korean nuclear crisis.
 “We’re at economic war with China,” Mr Bannon said.
“One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path. “The economic war with China is everything and we have to be maniacally focused on that,” said the presidential adviser.
“If we continue to lose it, we’re five years away, I think, 10 years at the most, of hitting an inflection point from which we’ll never be able to recover.”
Robert Kuttner, co-editor of The American Prospect, said Mr Bannon had phoned him on Tuesday, the same day that Donald Trump returned to his initial assessment that “both sides” had been to blame for the clashes between white supremacists and anti-Nazi protesters in Charlottesville, Virginia.
Mr Bannon, a leading figure in the “alt-right” movement before joining Mr Trump’s campaign, has been embroiled in a power struggle with HR McMaster, the president’s national security adviser. Blamed by more centrist White House officials for a stream of leaks against his foes within the administration, he was increasingly isolated before the events of last weekend.
The pressure on him has increased in the wake of the Charlottesville protests.
Mr Trump was equivocal about his adviser’s future at Tuesday’s press conference, saying “he is not a racist”, while adding ”but we’ll see what happens with Mr Bannon”.
During the call to Mr Kuttner, Mr Bannon dismissed the neo-Nazi movement in the US as a clownish “fringe element”.
“I think the media plays it up too much and we gotta help crush it,” he said.
“These guys are a collection of clowns.”
His comments will confirm Beijing’s worst fears about him.
Since Mr Trump assumed office, Chinese officials have lobbied more pro-China administration figures and Jared Kushner, the president’s son-in-law, and Ivanka Trump, his daughter, in an attempt to ease bilateral tensions.
So far the strategy has worked.
Mr Trump has backed off from threats to abandon Washington’s longstanding “One China” policy, to declare China a “currency manipulator” and to launch punitive trade actions against the world’s second-largest economy, especially if Beijing did not pressure North Korea to abandon its nuclear and missile development programmes.
According to Mr Bannon, North Korea was a “sideshow” in the context of a winner-takes-all competition between the world’s two largest economies and the US should not let up on trade issues in return for Beijing’s help in pressuring Pyongyang.
“There’s no military solution [to North Korea’s nuclear threats], forget it,” he said.
“Until somebody solves the part of the equation that shows me that 10m people in Seoul don’t die in the first 30 minutes from conventional weapons . . . they got us.”
On Monday Mr Trump announced that he would study unfair Chinese trade and investment practices in a probe that could take a year to conclude. 
But Mr Bannon promised to go on the offensive against China, saying he was fighting “every day” against the Treasury department, headed by Steven Mnuchin, and Gary Cohn, economic adviser.
He was working at “getting hawks in” at the defence and state departments, adding that his bureaucratic rivals were “wetting themselves”.
“We’re going to run the tables [on China],” Mr Bannon said.
“We’ve come to the conclusion that they’re [engaged] in an economic war and they’re crushing us.”