Bannon lays groundwork for economic war in China

Bannon lays groundwork for economic war in China.

“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 frequent intellectual-property theft was crippling the U.S. economy. This being Bannon, of course, he saw the dynamic through the prism of highly selective, slightly apocryphal events from ancient history. “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 hawkish 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 so-called “globalists,” who present as unlikely stewards of Trump’s campaign promises. He also doesn’t have much of an ally in the American electorate. After all, the U.S. needs China’s cooperation in curtailing North Korea’s nuclear ambitions, and starting a trade war with China would be disastrous for all parties involved. But 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.

Read more at Vanity Fair.

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