Bannon: US in “economic war” with China

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Via The Guardian:

White House chief strategist Steve Bannon has given an unusual interview in which he claimed there was no military solution for North Korea, the far right was a “collection of clowns” and the left’s focus on racism would allow him to “crush the Democrats”.

Bannon, who has been called the mastermind behind Donald Trump’s nationalist agenda, made the controversial and unsolicited remarks to Robert Kuttner, co-founder and co-editor of the American Prospect, a leftwing political magazine, in an interview published Wednesday.

The seemingly candid comments – which included the claims that he would oust his rivals in the federal government, who were “wetting themselves” – come at a time when Bannon faces an uncertain future at the White House. There have been increasing calls from the left and the right for the removal of the former editor of Breitbart News. When Trump was asked at a press conference this week if the chief strategist would remain in his position, the president said: “We’ll see.”

It is unclear why Bannon chose to call Kuttner, who wrote that he had not requested the interview and was “stunned” to hear from him. However after publication stories circulated that Bannon was unaware he was providing an interview.

There have been recent reports of internal conflicts and power struggles within the administration, and Bannon made the call amid an intense backlash related to Trump’s links to the far right and the president’s comments that there were “very fine people” at a violent white nationalist protest in Charlottesville.

In the American Prospect story, headlined “Steve Bannon, unrepentant”, Trump’s top aide said: “We’re at economic war with China. 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.”

Contradicting Trump’s threats of “fire and fury” on North Korea, 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 10 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 also discussed his “battle inside the administration to take a harder line on China trade”, Kuttner wrote. Asked about his adversaries at the US departments of state and defense, Bannon responded, “Oh, they’re wetting themselves.”

He continued: “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.”

Contrast this today with formerly Chinese funded super-uber-ultra-China bull James Laurenceson at the AFR:

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Ask the average Australian whether China or the US is the country’s most important economic partner and you’ll likely get a bewildered look – it’s China, of course. The Lowy Poll shows that by 2013, 76 per cent of Australians were already convinced that China was No.1, compared with just 16 per cent choosing the US.

…In 2016, trade and investment flows with China stood at $178 billion. Those with the US were not only less than with China, they were less than zero, -$27 billion. As usual, trade with China last year towered above that with the US. But US investors also pulled $66 billion more out of Australia than they put in, while Australian investors dialled back their US asset holdings by $25 billion.

…The growing economic weight of China is remaking the strategic balance of our region. Australia’s relationship with the US will be a valuable asset for both countries in navigating these shifts. But pursuing Australia’s national interest means accepting that Australia’s most important economic relationship is now with China.

In short, the US views the Chinese relationship as binary whereas naive Australian China bulls see it as a continuum. I might add that this is the one policy area that both sides of US politics agree on, recalling Obama’s “pivot to Asia”.

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There are two interpretations here. One is that China is rising peacefully and will never muscle out as a hegemonic power, holding back its values, hard and soft powers and interests. The other is that like all great powers before it it will seek to assert itself in a wider sphere of influence using every available tool.

If it is the former then Australian economic policy is making a wise choice and we are an asset to the US. If it is the latter then Australia is a treacherous liability as the greedy little penal colony runs full tilt towards China in trade and migration policies while pretending to care about the displacement of the US in the region.

To me, making that choice now, before we know the outcome, is bloody stupid.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.