BANNON LAYS GROUNDWORK FOR ECONOMIC WAR IN CHINA

The promise Bannon made as a White House adviser may soon become a reality.

BY TINA NGUYEN

“We’re at economic war with China,” Steve Bannon told The American Prospect just days before he left the White House. 

The interview, which presaged his return to Breitbart, appeared to suggest the broad contours of Bannon’s thesis regarding the complex power struggle currently taking place in East Asia. 

China, which shares a 900-mile border with North Korea, accounts for 90 percent of the country’s trade. 

The United States and South Korea, meanwhile, have been close allies since the Korean War. 

The cold war being waged across the DMZ on the Korean Peninsula remains, in may ways, a proxy between the U.S. and the People’s Republic, which have long been engaged in skirmishes over I.P. theft, price undercutting, and job exportation. 

“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,” Bannon opined to Robert Kuttner, who days before had compared his boss, Donald Trump, to the “arrogant fool” Kim Jong Un. 

“On Korea, they’re just tapping us along. It’s just a sideshow.”
Donald Trump entered the White House prepared to hold China accountable for what he saw as currency manipulation, among other economic maneuvers. 

But Trump hasn’t quite stood by his harsh rhetoric. 

But Bannon, who is now comfortably outside the confines of the West Wing, appears prepared to turn his anti-China war into reality, enlisting allies from Henry Kissinger to Hong Kong investment banks in his fight against Chinese trade practices. 

In an interview with Bloomberg’s Joshua Green, author of the recent magnum opus Devil’s Bargain, Bannon agreed with the common perception that China’s systematic intellectual-property theft was crippling the U.S. economy. 

“There have been 4,000 years of Chinese diplomatic history, all centered on ‘barbarian management,’ minus the last 150 years,” he told Green. 

“It’s always about making the barbarians a tributary state... Our tribute to China is our technology—that’s what it takes to enter their market, and [they’ve taken] $3.5 trillion worth over the last 10 years. We have to give them the basic essence of American capitalism: our innovation.”
It’s one thing for Bannon to talk up a trade war with China, but it’s another for him to be actively agitating for one. 

Earlier this month, Bannon spoke at a conference in Hong Kong, sponsored by a Chinese bank, in which he called the former British colony “the heart of the economic-nationalist movement [that] is standing up to China.” 

He also took several meetings with Cold War-era figures, including Kissinger, the Nixon-era secretary of state who opened the door to trade with China and has been enjoying lucrative consulting fees pretty much ever since, in which the two discussed the Committee on the Present Danger, a foreign-policy interest group. 

“They understood that you couldn’t do it from inside,” Bannon says. 

“You had to go outside and, like a fire bell in the night, wake up the American people.”
For now, Bannon does not have an ally in the White House, which is currently full of figures like Gary Cohn, Steve Mnuchin, Dina Powell, and other “globalists,” who present as unlikely stewards of Trump’s campaign promises. 

He also doesn’t have much of an ally in the American electorate. 

Bannon hopes that he and his allies can pressure Trump from the outside to keep to his China promises—a similar tactic he’s used in his other political activities, such as backing the populist Roy Moore against the Trump-endorsed Luther Strange in the recent Alabama Senate race. 

Now that Bannon has made his influence known, he told Green that he was ready to keep flexing his newfound political muscle, with the goal of getting populist, hard-line, anti-China candidates into Congress. 

“Every day we are going to be making China a huge part of the ’18 and ’20 elections,” he promised.

Trump has filled his vaunted trade team with China hawks — and we love it

By Allan Smith

President Donald Trump this week filled his lone remaining top trade post with yet another China hawk — much to the delight of trade reformers.
Trump on Tuesday tapped Robert Lighthizer as his choice for US trade representative. 

Lighthizer was the deputy US trade representative under President Ronald Reagan and has been a longtime critic of Chinese trade practices.
The soon-to-be chief US trade negotiator, Lighthizer worked to curb Japanese imports in the 1980s using threats of quotas and tariffs, similar to Trump's threats against American companies looking to import products from China. 

Lighthizer has spent decades as a lawyer representing US steelmakers and other companies in cases that led to a significant reduction in Chinese steel imports.

Lighthizer's appointment joins him with two other prominent China hawks among Trump's team of trade advisers. 

It signals "a return to the Reagan era of unilateral trade policy," Sharyn O'Halloran, a political economics professor at Columbia University, told Business Insider in an email.
In 2010, Lighthizer wrote in testimony to Congress's US-China Economic and Security Review Commission that the trade deficit between the US and China was at the point where it was "widely recognized as a major threat to our economy."
Lighthizer joins Peter Navarro, an economic adviser to Trump's campaign and a fellow outspoken China hawk. 

Trump tapped him to lead a newly formed White House National Trade Council.
Navarro has written books such as "Death by China" and "Crouching Tiger: What China's Militarism Means for the World." 

He too has advocated a more aggressive stance in the economic war with China.
In a release about Lighthizer's appointment, the Trump transition team wrote that Lighthizer, Navarro, and the nominee for commerce secretary, Wilbur Ross — who went to war against Chinese steelmakers in the early 2000s — will work in "close coordination" on trade policy.
Of course, the get-tough-on-China message originates from the top, as Trump has accused China of "raping our country" and being at the head of the greatest "jobs theft" in history.
Trade reformers praised Trump's latest move, with Michael Stumo, the CEO of the Coalition for a Prosperous America, calling Lighthizer and "excellent choice" to replace current US Trade Representative Michael Froman.
The head of Trump's trade transition team, Nucor CEO Dan DiMicco, is on the board of CPA.
"He understands that international trade is a strategic game of conflicting national interests and a competition for good jobs and industries," Stumo said in a statement. 

"America must move past the failed and simplistic Econ 101 trade policy of the past because the results have been an economic carpet bombing of the non-urban areas of the US.
"We are confident that the combination of Lighthizer, Peter Navarro, and Wilbur Ross will be effective in working to balance trade, achieving net creation of good jobs, and growing a diverse manufacturing supply chains here."
Lori Wallach, the director and founder of Public Citizen's Global Trade Watch, also praised Lighthizer's appointment.
"Lighthizer is very knowledgeable about both technical trade policy and the ways of Washington, but what sets him aside among high-level Republican trade experts is that for decades his views have been shaped by the pragmatic outcomes of trade agreements and policies rather than fealty to any particular ideology or theory," she said in a statement.
Even Democratic Sen. Sherrod Brown of Ohio, one of the more liberal members of the legislative body and fellow trade-reform advocate, said he looked forward to hearing how Lighthizer would pull through on Trump's trade agenda.
"President Trump campaigned on the promise that he would rewrite US trade policy and create more manufacturing jobs," he said in a statement. 

"I look forward to hearing from Mr. Lighthizer how he will accomplish these goals, including withdrawing from the Trans-Pacific Partnership, renegotiating NAFTA, and resetting the US-China trade relationship."
The core combination of Lighthizer, Navarro, and Ross view trade as being a "zero-sum game about winners and losers," said Joshua Meltzer, a senior fellow at the Brookings Institute.
He said it remains to be seen how the ideology plays out in governance, but added that he expects "a fairly aggressive trade policy coming out of the Trump administration."
Meltzer said views in Beijing are mixed about how Trump and his top trade team would affect relations between the two countries.
"I think on the one hand there's been a view in Beijing for a while now that Trump's a businessman who does deals and that this will open up opportunities to make progress in some areas that are important to Beijing," he said. 

"That may not have been possible under a [Hillary] Clinton presidency. I think they see Trump as very transactional."
But "at the same time now there is a growing appreciation that the Trump administration is going to present a whole range of challenges to China, from currency through to investment and market access and the like," he continued. 

"So I think they are trying to assess how bad this is going to get, how far he's willing to take this."

Icahn: If we’re going to get into a trade war with China, maybe it is better to do it sooner

By Allan Smith

Carl Icahn

Billionaire investor Carl Icahn — one day after being named a special adviser to President Donald Trump — said it might be better to have a trade war with China "sooner" so the US could "get it over with."
During a lengthy interview with CNBC's "Fast Money Halftime Report," Icahn was repeatedly asked if he was concerned about the market — which has shot up considerably since Trump won the presidency.
Icahn admitted he was "concerned about the market in the short term" because there are "so many factors here that you have to worry about."
That's when the hedge fund titan mentioned China.
"If you get into a trade war with China, sooner or later we'll have to come to grips with that," he said. "And maybe it's better to do it sooner, but that's not my decision at all."
"I remember the day something like that would really knock the hell out of the market," he continued. "But maybe if you're going to do it, you should get it over with, right?"
Trump has consistently railed on Chinese trade practices during the campaign and along his "thank you" tour, during which he said the nation was the root cause of the greatest "jobs theft" in history. The president has been forthcoming in suggesting a trade war could take place.
On Wednesday, Trump tapped Peter Navarro, an economic adviser to his campaign and an outspoken China hawk, to lead a newly formed White House National Trade Council.
Navarro is well known for his tough-on-China stance, and has authored books such as "Death by China" and "Crouching Tiger: What China's Militarism Means for the World."
He has advocated a more aggressive stance in the economic war with China.
Icahn's position, which was also announced Wednesday, included advising the president on regulation, in addition to having a role in selecting the new head of the Securities and Exchange Commission.
He has long been a critic of government regulations, most notably those closely tied to the Environmental Protection Agency, as he has several large investments in oil and gas companies.