Thursday, August 17, 2017

EXPOSED Steve Bannon's Plan to Launch a Maniacal Trade War Against China

This is pretty incredible. Trump's top adviser Steve Bannon called up a lefty writer, Robert Kuttner, co-founder and co-editor of The American Prospect, and professor at Brandeis University's Heller School, and revealed his entire aggressive plan to launch a trade war with China.

First, here's Kuttner setting the scene:
More puzzling is the fact that Bannon would phone a writer and editor of a progressive publication (the cover lines on whose first two issues after Trump’s election were “Resisting Trump” and “Containing Trump”) and assume that a possible convergence of views on China trade might somehow paper over the political and moral chasm on white nationalism.

The question of whether the phone call was on or off the record never came up. This is also puzzling, since Steve Bannon is not exactly Bambi when it comes to dealing with the press. He’s probably the most media-savvy person in America.
Here's Bannon's plan as reported by Kuttner:
“We’re at economic war with China,” he added. “It’s in all their literature. They’re not shy about saying what they’re doing. 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. On Korea, they’re just tapping us along. It’s just a sideshow.”

Bannon said he might consider a deal in which China got North Korea to freeze its nuclear buildup with verifiable inspections and the United States removed its troops from the peninsula, but such a deal seemed remote. Given that China is not likely to do much more on North Korea, and that the logic of mutually assured destruction was its own source of restraint, Bannon saw no reason not to proceed with tough trade sanctions against China.

Contrary to Trump’s threat of fire and fury, Bannon said: “There’s no military solution [to North Korea’s nuclear threats], forget it. Until somebody solves the part of the equation that shows me that ten million people in Seoul don’t die in the first 30 minutes from conventional weapons, I don’t know what you’re talking about, there’s no military solution here, they got us.” Bannon went on to describe his battle inside the administration to take a harder line on China trade, and not to fall into a trap of wishful thinking in which complaints against China’s trade practices now had to take a backseat to the hope that China, as honest broker, would help restrain Kim.

“To me,” Bannon said, “the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we're five years away, I think, ten years at the most, of hitting an inflection point from which we'll never be able to recover.”

Bannon’s plan of attack includes: a complaint under Section 301 of the 1974 Trade Act against Chinese coercion of technology transfers from American corporations doing business there, and follow-up complaints against steel and aluminum dumping. “We’re going to run the tables on these guys. We’ve come to the conclusion that they’re in an economic war and they’re crushing us.”

But what about his internal adversaries, at the departments of State and Defense, who think the United States can enlist Beijing’s aid on the North Korean standoff, and at Treasury and the National Economic Council who don’t want to mess with the trading system?

“Oh, they’re wetting themselves,” he said, explaining that the Section 301 complaint, which was put on hold when the war of threats with North Korea broke out, was shelved only temporarily, and will be revived in three weeks. As for other cabinet departments, Bannon has big plans to marginalize their influence.

“I’m changing out people at East Asian Defense; I’m getting hawks in. I’m getting Susan Thornton [acting head of East Asian and Pacific Affairs] out at State.”

But can Bannon really win that fight internally?

“That’s a fight I fight every day here,” he said. “We’re still fighting. There’s Treasury and [National Economic Council chair] Gary Cohn and Goldman Sachs lobbying.”

“We gotta do this. The president’s default position is to do it, but the apparatus is going crazy. Don’t get me wrong. It’s like, every day.”

Bannon explained that his strategy is to battle the trade doves inside the administration while building an outside coalition of trade hawks that includes left as well as right. Hence the phone call to me.
Absolutely incredible. Bannon appears to be a bright guy but has no clue about the benefits of free trade. He further seems to hold the view that the United States is going to lose dominance in the world if it continues to trade with China. How is it possible that trade, which would benefit both countries, would weaken the United States in any way?



  1. What is it with people in government who see everything as a "war"? "Trade war,", "War on Drugs,", "War on Terror," "War on Women," etc. It's such a conflict-laden mentality. I can see two possible causes: (i) politics, through the use of force, is a zero-sum game, so there are winners and losers and thus everything can be seen as a battle; (ii) American imperialism abroad and aggressive policing at home has led to the militarization of society, where it's entirely acceptable to think in terms of "war." (It doesn't help that El Jefe is increasingly surrounded by military types.)

  2. I really don't understand the supposed issue with "dumping." Why wouldn't domestic producers just mothball their production and be ready to resume once the dumper had lost too much money to continue? And why wouldn't importers just stockpile the dumped product so they could make a killing later on? Wouldn't it make more sense to let domestic industry profit off of another country's stupid policy rather than preventing them from doing so?