Steve Bannon on the US-China trade war (full interview)

a little squabble i don't know if you saw that that that sound bite i read your op-ed piece and i understand that the the president gets very colloquial uh at times but in your view this is anything but a little squabble yeah joe i think what's uh what's interesting is that in your co-host for this hour tom friedman can tell you that i think it was almost two years ago to the week that tom came back from beijing came to the west wing of the white house and we sat in my small office we called the war room just down from the oval office and had this exact same discussion uh the united china has been running an economic war if i talked in cmbc at your conference last summer and the many times i've been on here china's been running an economic war against the industrial democracies for now 20 years eventually when the companies as tom laid out in his op-ed piece this week when the company stopped making money people realized with made in china 2025 one belt one road and huawei's 5g rollout this is a a master plan to become an economic hegemon this is why that 175 to 200 page contract wasn't really about the trade aspects of it really wasn't about how many soybeans they're going to buy et cetera the fundamental parts were to go into these deep verticals of state capitalism and demand transparency and accountability to demand monitoring and enforcement and that's why when the chinese finally woke up after nine months of negotiating with president trump and bob lighthizer they refused and basically walked away from the deal because they understood that they've been running an economic war in this that this is not a trade deal this is a truce and an economic war an armistice so to speak and that they weren't prepared to do it i think you've seen over the last 48 hours what their response has been trying to jack up the hyper nationalism but as tom friedman ended his column this is not a front page business story this is history in real time it's the most significant thing that any president could possibly do this is cuts to the core of what the united states is going to be in the future and what our relation our geo strategic relationship is going to be with china well that sounds like when we talk about the stock market we have and let's give us near-term intermediate term and long-term projections and i think we need to break this down into that as well because long-term it seems like this is going to go on for years but there's going to be near-term developments that are going to be required by by whoever's watching this we're going to need to know something within the next month or as the election comes closer in in 2020 we're going to need some type of agreement some type of understanding to talk more later because with the what you're presenting to me steve it looks like a lose-lose i don't see how china ever would agree to what we need them agree to to to get a real trade deal i i disagree with this i think it actually will be a win-win the system that china has particularly the slave labor they have now in the chinese population this kind of this is about this radical cadre in the ccp you cannot possibly have this totalitarian surveillance state it can't exist you have the industrial democracies okay what we're trying to do and i think what trump is trying to do very thoughtfully is to bring them into really a world system a system that tom friedman and others have talked about the problem is we allowed the city of london wall street and the corporatist to create a system that worked for them and didn't work for working-class people one of those people in in ohio or michigan or wisconsin are here in germany this is why donald trump's president united states it was the sen as jd vance points out it's the sending of the factories to china the loss of the jobs and the importation of the opioids because of this crisis of kind of angst that has developed this crisis in the upper midwest that's why joe biden kicked off his campaign in in pittsburgh people understand that this is where the presidential election of 20 is going to be decided is where the presidential election in 16 was decided this can be a win the chinese business model cannot continue and it won't continue you can stop it by stopping the forced technology transfers allowing the intellectual property and industrial espionage to stop and stop financing it we have full capabilities in the west to stop this right now and help china evolve into a real industrial power along rules the rule of law and everything that they've agreed to for 20 years they haven't played by not just not played by done the exact opposite and i think it's now time for people to stop harping you know the fear project particularly the wall street cheerleaders and their pompoms the fear project didn't work the stock market didn't implode the us economy didn't implode in fact with trump's trade policies we're getting a boost now from trade import prices are dropping employment's up so now they're going to go to the farmers they're going to try the fear project by the wall street junta and the corporatists are going to try to take president trump off of this very focused approach he has to truly really bring the world together in peace and prosperity steve i guess my point about it being lose lose i don't know how we could expect china to agree to give up some of these core principles or advantages that allow them to compete in in technology as you point out a lot of that has been been through ip theft so in your article you say germany south korea japan uh you know if they were precluded from from stealing the intellectual property they'd be also iran's in a lot of these industries what would cause them to agree to any type of uh um you know to to come into the the 21st century like like you want them to do what would cause them to to say sure we'll do this they won't unless they're forced and that's what this agreement's about remember what they walked away from was the detail that lighthizer had in this agreement on both real-time monitoring and enforcement and this was not to have some regulatory apparatus this was to put into chinese law so they they couldn't sit there later on and re-trade the president re-trade the united states the way you do this is you do it you cut off the technology you stop the force technology transfers you saw this npr piece where the companies that had all the technology ripped off didn't want to raise their heads they were afraid of retaliation you stopped the retaliation and most importantly you get the wall street hedge funds and the money managers in the investment banks and you cut off the capital if you cut off the capital you stop them stealing the for the technology you stop the forced technology transfers you stop them from exporting deflation and over capacity by these subsidies of state industries if you just make them play by the rules they've already agreed to okay it will be a transitional period but on the other side china will actually join us as an industrial power that we're not sitting there this is not against the chinese people i have a great affinity i've lived there i've owned businesses there this about this radical cadre the ccp that has an unsustainable business model it's incumbent upon us we have all the cards we have all the cards and now that's what donald trump's showing immense leadership in trying to do this it'd be very easy for him to sign some trade deal where they bought more soybeans and have the cheerleaders on wall street say this is terrific have the stock market go up for a moment right and but what he's doing is looking at the long term what people criticize him about he doesn't have a strategic plan he's got it i think tom friedman understands it he just wrote about it this is cuts to the core of what the world economy is going to be and it plays to working class people whether those people are in germany england or in the united states it's all being done uh in in a very public way and i think one of and i'll let tom speak for himself but his view is that maybe um the diplomacy by tweet or or uh you know talking so much that both sides can't save face and it becomes you know here we're seeing the nationalism rise on both sides tom you think it might be better to do it uh behind the scene yeah i mean i i really agree with so much of um what steve said and wrote today and have been saying this for a while um and the stakes of this moment um i think people don't fully appreciate and i think that therefore the difficulty of this moment i don't think people fully appreciate steve give me your analysis of the politics so i happen to believe china's misreading of trump and america on this issue is actually one of the biggest intelligence failures of the chinese government ever and it was an avoidable failure because a lot of what you've been saying i've been saying i actually learned from the american business community in china they actually flipped on this issue a couple of years ago but i picked up the washington post today and i saw an article about how republicans are now really breaking with the president particularly from ag districts give me your analysis of the republican politics on this issue and whether you think the president will be able to hold firm remember tom when you came to the white house this time two years ago you come back from beijing we had this exact discussion remember the biggest pressure the president's got is kind of from his allies it's both the republican free trader and you can't have free trade in what when that's the system is half mercantilist and half free trade that's what trump's going after and i think you're correct the politics of this is that the republicans have really put the most pressure on him his allies on wall street have put the pressure on him not understanding that this is this is the main thing this is what it's about this is going to set the world and it's in one direction or the other for the next 20 30 40 or 50 years and we've let this drift for so long with people that really didn't have their national interest in mind had their own self-interest in mind that's why this is so important i hate to say it i would like to see a process started that you had like in mar-a-lago you had president trump and president xi more directly engaged i think li who who's a reformer and and uh and lighthizer are fantastic as negotiators i think this needs to be principles i think it needs to be principals face-to-face but i got to tell you there is no chance donald trump backs down for this i think he's looking at the good of people on a global basis i don't see him backing down on this i said i think he's going to set the framework for the 2020 election this is as important as it gets but i do agree with you i think we need the leaders and i think we need to take the heat down and i think they need to get behind closed doors and start a process that's going to take a long time to take this is not going to take place overnight this is not going to take place at the g20 the differences here are too fundamental steve what are you hearing from you're over in berlin now um what are you hearing from europeans because they actually uh this never should have been uh a story about us and china alone this has always seemed to me a story of both the europeans and our asian allies it is why i supported tpp um and why i did oppose the steel and aluminum tariffs on europe i think we all needed to line up shoulder to shoulder on this it should not be us alone because if you talk to the europeans and i'm sure you have they have the exact same problems we have what are you hearing over there what are they saying about our strategy see but i think trump's strategy here is working these bilateral deals with korea increased defense spending a bilateral deal with japan now a bilateral deal is going to get into with the eu it's here in germany their business model of advanced precision manufacturing is what's going to be gutted first they are at the tip of the sierra when you look at made in china 2025 it's the great you mentioned in your article kaka or kuka the great robotics company is the centerpiece that they've taken it's germans germany's business model when i talk to both politicians think tank people and business people they understand the storm is right over the horizon they're going to be the tip of the spear they're really going to be i think the first industrial power that's really gutted and the europeans understand but you got to remember something the eu or just like hillary clinton these people the elites in our country tom and you know this they thought the rise of china on this business model of china was like the second law of thermodynamics it was some physical reality we just had to accept thucydides trap says we're the declining power they're the rising power what donald trump said is you've got it wrong we're the not only rising power we're the dominant power and we're going to reform the world along lines of free market democratic capitalism and here's how it's going to be you've got to break you've got to you got to lance the boil and that's what donald trump is doing right now i think our european allies gonna come around i think they're gonna individually come around to this because i think they see the wisdom and the toughness of what trump's doing steve it's always been clear to me the chinese wanted to negotiate with mnuchin and not lighthizer because i think lightheiser is someone who knows every carpet the chinese have sold us over the last 30 years how do you think that will play out in the administration i think you're dead spot on i think bob ly i look at president trump from my m a days at goldman sachs is trump is like the chairman ceo of the company in a massive bet the company uh m a and lighthouse is the scad narps partner that's your deal lawyer bob lighthizer there's no gap between lighthizer and president trump lighthizer is the guy that does the execution that contract when people actually end up seeing it i think we'll see how thoughtful it is how well crafted it is how it actually works for the chinese it takes care of a lot of their corruption issues this is about transparency it's about accountability it's about real-time monitoring and it's about enforcement what lighthizer did with lee hood and lee people should understand is also one of the greatest men in the world i think he's a reformer in china he understands what has to happen to their system these two have worked together for nine months it was the hawks it was after the belt road initiative forum in china when the hawks like wang qui shan and wang shishan and others got around she and said hey why do we need the americans we got a tough this is nothing more than a port treaty from the 19th century this was this is what started the 200 years of humiliation we have to shut this down now so that red line they sent around was basically say we're not going to take any of the things that light heiser and leho have negotiated for nine months the basic architecture of the deal that's why this is defining moment and every president beforehand clinton bush and obama have all blinked trump didn't blank he could have cut a deal that made him look like a hero he said we're not doing this we're not going to be retraded this is what i need lighthizer you told me you're going to get this let's let's just power through this i want to talk about lancing the boil steve i understand the long-term the the goal of this i actually agree with the goal of that myself as well but overlay politics on this i mean if lansing the boil causes an economic downturn if lance in the boil causes a decline in the stock market of more than 10 percent and it's around election time what happens to the resolve first off i don't think that's going to happen but i think you realize with joe biden launching in pennsylvania this is going to be the debate the american workers the men the men and women that saw those factories leave the american farmers understand these are patriots they put the national interests of the country before their own personal interests they've seen the elites totally do this for themselves they understand they finally they have a voice in the room that's looking out for them and looking after their children and grandchildren this is china's business model is an existential threat to the industrial democracies the united states germany england japan korea all of us it has to be done now there may be some short-term pain okay but donald trump and i think others understand we have to power through this now it turns out that the numbers on trump's plan are actually better the three 3.2 percent growth is driven by the decline in exports from china the the import prices are falling right the employment a lot of it's tied to this so right now this is working i happen to think and i think trump believes and the people around trump believe it's going to continue to work but i got to tell you he's not going to back down from this this is the core of vice president united states this is the core of american decline this is the turnaround of america this is bringing manufacturing jobs back i believe those citizens in those northern industrial states will say hey this guy finally stood up to him started bringing the supply chain back and i'm with him steve this is uh i don't know if we'll do this again i'd like to i'll let you know next time we we do this tom and tom will be back maybe you'll be back i don't know if we'll have a great shot like that of the brandenburg gate but uh this is uh this has been compelling and we appreciate it and we wish you all safe travels you

Channel: CNBC Television

Views: 1,001,954

Rating: 4.1427183 out of 5

Keywords: CNBC, business news, finance stock, stock market, news channel, news station, breaking news, us news, world news, cable, cable news, finance news, money, money tips, financial news, stock market news, stocks, Tariff on china, tariff china, tariff definition, us china tariff, china tariffs trump, china tariff list, trump tariff, china tariff news, tariffs news, us tariff on china, trade war, china steel tariff, chinese economy, huawei ban

Id: oYraLI04WiU

Length: 16min 56sec (1016 seconds)

Published: Wed May 15 2019

Reddit Comments

[u/Tuan-Phung]

Wow

[u/KiraTheMaster]

Most the times I listened to Bannon, he is a weird ass man. Suddenly, he sounds so wise in this interview like an actual scholar, even after all of those drinkings in his past.