There will be “no chance” President Donald Trump will back down inside the U.S. trade war with China, former Trump advisor Steve Bannon told CNBC on Wednesday.
“China has been running an economic war against the industrial democracies for today 20 years,” said the hardline ex-White House chief strategist, who helped craft Trump’s nationalist message.
Bannon said previous presidents — Bill Clinton, George W. Bush in addition to Barack Obama — passed the buck on addressing in addition to fixing the problems of China’s protectionist economy. nevertheless Trump will be not shying away through the fight, he added.
“There will be no chance of which Donald Trump backs down through This particular. I think he’s looking at the not bad of people on a global basis,” Bannon said inside the “Squawk Box” interview.
Under Trump, Washington has taken a tougher stance on China than his recent predecessors. In addition to disputes around trade in addition to the alleged Chinese theft of U.S. intellectual property, American intelligence chiefs expressed their distrust of Chinese tech giant Huawei in addition to Chinese telecom company ZTE.
The standoff with China “cuts to the core of what the United States will be going to be inside the future,” Bannon said. “With ‘Made in China 2025,’ ‘one belt-one road,’ in addition to Huawei’s 5G rollout, This particular will be a master plan to become an economic hegemon, ” he added, referring to Chinese policies on its economy in addition to trade.
U.S. officials have repeatedly said the Chinese stock market in addition to economy have suffered more than those inside the U.S. through the tariff fight, in addition to will continue to bear the brunt. On Wednesday, China reported surprisingly weaker growth in retail sales in addition to industrial output for April, adding pressure on Beijing to roll out more stimulus as the trade war with the United States escalates.
“We have all the cards,” Bannon said. “The Chinese business product cannot continue. the item won’t continue.”
For its part, China’s Communist Party has remained defiant, putting out a rallying cry in state media.
The deal of which Trump has said China backed out of was not definitely about trade, Bannon said. “They refused in addition to basically walked away through the deal because they understood of which they’ve been running an economic war in This particular. in addition to This particular will be not a trade deal. This particular will be a truce in an economic war, an armistice so to speak, in addition to of which they weren’t prepared to do the item.”
With trade talks at a stalemate, the U.S. will be considering putting tariffs on the remaining billions in addition to billions of dollars worth of Chinese goods coming into the U.S. Last week, the Trump administration followed through on its threat in addition to increased duties on $0 billion worth of Chinese products through 10% to 25%. On Monday, in retaliation, China announced plans to raise tariffs, some to as high as 25%, on $60 billion in U.S. goods.
Trump’s tweets in addition to tough public rhetoric aside, negotiators for both sides — led by U.S. Trade Representative Robert Lighthizer in addition to China Vice Premier Liu He — need to get behind closed doors, “take the heat down” in addition to work hard on getting an agreement, Bannon said. “This particular will be not going to take place overnight.”
Addressing a question about whether the Chinese might have rather negotiated with Treasury Secretary Steven Mnuchin than China-hawk Lighthizer, Bannon praised Lighthizer. “There will be no gap between Lighthizer in addition to President Trump.”
Since May 5, when Trump surprised investors with tweets threatening higher tariffs on China, the S&P 500 had lost about $1.1 trillion in value — the type of decline of which if the item were to persist could put a real drag on U.S. economic growth. The index made some of of which back with Tuesday’s nearly 1% recovery after Monday’s 2.4% decline. Despite the knock through trade concerns, the S&P 500 was still only 4% away through its May 1 all-time intraday high as of Tuesday’s close, in addition to up more than 20% since the 2018 low on Christmas Eve.
The China dispute certainly makes for strange bedfellows, with Trump facing calls through allies on Wall Street in addition to free-trade conservatives to reach a deal. U.S. stocks opened lower Wednesday. Meanwhile, Democrats including Senate Minority Leader Chuck Schumer are urging the president to extract the most concessions possible through China.
Bannon, a Goldman Sachs alum who became a proponent of nationalism, said he believes the China issue will frame the 2020 presidential campaign in favor of Trump. “This particular will be history in real time. This particular will be the most significant thing of which any president can possibly do,” he said, adding of which Trump won’t bow to the pressure in addition to make a superficial agreement of which doesn’t address all the ways Beijing will be cheating economically.
On Tuesday evening, former Goldman CEO Lloyd Blankfein was on the same wavelength as Bannon, tweeting, “Tariffs might be an effective negotiating tool.”
— CNBC digital correspondent in Singapore Yen Nee Lee in addition to Reuters contributed to This particular report.
CNBC’s before the bell news roundup