In a surprising interview with the small liberal magazine The American Prospect, White House chief strategist Steve Bannon said there is “no military solution” to North Korea, declared that “ethnonationalists” like those who rallied in Charlottesville were “losers,” and threatened an “economic war” against China.
Bannon hasn’t given a ton of interviews since President Trump’s inauguration, perhaps due to his boss’s apparent frustration with breathless coverage of “President Bannon’s” influence. Indeed, he appears to be on thin ice in the Trump White House, with reports indicating that Chief of Staff John Kelly has soured on him, and Trump telling reporters “we’ll see” if Bannon stays in the White House.
So it was somewhat surprising to see him offer, unsolicited, an in-depth policy interview to a small labor-liberal publication in DC (the post is currently crashing the magazine’s servers; a cached version is available here). According to Axios’s Jonathan Swan, Bannon did not realize that he had agreed to an interview: “Apparently Bannon never thought that the journalist might take his (very newsworthy) comments and turn them into a story.” According to the Prospect, Bannon never specified that the comments were off the record, a strange blunder from the White House’s chief strategist and a former media executive.
It was particularly surprising, in light of the deadly white supremacist rally and riots in Charlottesville, VA, whose participants Trump has declined to distance himself from and even partially defended, that Bannon told the Prospect, “Ethno-nationalism—it’s losers. It’s a fringe element. I think the media plays it up too much, and we gotta help crush it, you know, uh, help crush it more. These guys are a collection of clowns.” It’s a big shift for Bannon, who just last summer proudly declared Breitbart, which he used to run, the “platform for the alt-right.”
Bannon had called up Robert Kuttner, the publication’s co-founder and co-editor, and a veteran left-leaning voice in Democratic circles, after a column Kuttner had written about Trump, China and North Korea.
Bannon told Kuttner he’d “followed your writing for years and I think you and I are in same boat when it comes to China.” Bannon’s not wrong there. Kuttner is a vocal critic of international trade deals and in particular of China’s trade behavior. “If the Western democracies had a realistic conception of their long-term interest, they would add high tariffs to Chinese goods until China began behaving like a normal commercial nation,” Kuttner wrote in 2009. “The proceeds could be used to rebuild our own industry.”
In the interview, Bannon struck a similar tone, promising an “economic war” against China and laying out exactly how he’d want it to go down:
“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.”
The President has significant authority under federal law to retaliate against countries he believes are trading unfairly. Section 301, for example, authorizes tariffs and quotas against a country ruled to be engaging in “unjustifiable, unreasonable, or discriminatory” trading behavior. There are a number of statutes Trump could choose from in bringing tariffs against Chinese steel and aluminum. These would likely cause China to retaliate with tariffs of its own, launching an international trade war leaving everyone, particularly poor people in China, worse off.
One geopolitical reason not to do this is that China is by far the largest trading partner of North Korea, which gives it significant economic leverage with which to pressure the regime. The Trump administration might want to stay on China’s good side to try to push North Korea to stop missile tests and slow its nuclear program.
But Bannon suggests that for him, at least, this is not a priority:
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.