Economic Warfare with China: Steve Bannon's Vision of Trump’s Trade Tactics as Global Game-Changer
Delving Into Bannon's Insights: A Strategic Battle Against the Chinese Communist Party (CCP) or... Economic Gamble?
Editor's Note:
In the annals of modern history, certain strategic maneuvers have transcended the immediate realm of policy to become defining strokes against formidable geopolitical adversaries.
Recall the 1980s—a decade marked by President Ronald Reagan's audacious initiative known as the "Star Wars" program. Formally termed the Strategic Defense Initiative, it was an ambitious plan to protect the United States from potential nuclear attacks using ground- and space-based systems.
While the program itself never fully materialized, its very conception and robust funding sent tremors through the geopolitical landscape, exerting immense pressure on the Soviet Union's economy and contributing to the eventual collapse of the Russian Communist Party.
Fast forward to the present: Steve Bannon, in a provocative discourse with Jan Jekielek (click video link below), draws a parallel narrative in the landscape of U.S.-China relations with President Donald Trump at the helm.
Bannon articulates a vision where Trump's deployment of tariffs is not merely an economic gambit but a comprehensive act of “economic warfare” aimed at reshaping the global trade arena.
Much like Reagan's Star Wars sought to topple the Soviet pillar of Communist influence… Trump’s tariffs are framed as precision instruments intended to weaken the economic underpinnings of the Chinese Communist Party (CCP).
Just as Reagan's gamble on technology and defense reshaped a Cold War epoch, might Trump's tariff strategy be the catalyst to redefine the global economic order today?
As you read this blog post, think about the intersections of past and present tactics in the enduring struggle for global influence and stability.
The interview between Jan Jekielek and Steve Bannon on American Thought Leaders offers a stark perspective on the current state of US-China trade relations.
Bannon frames President Trump's trade policies not as isolated economic measures, but as a comprehensive act of "economic warfare" intended to fundamentally restructure the global system of commerce and trade, with a particular focus on countering the influence of the Chinese Communist Party (CCP).
Bannon's central thesis revolves around the idea that President Trump's tariffs are more than just tools of negotiation; they represent a strategic weapon in this economic conflict, designed to achieve a far-reaching reorganization of global trade and potentially weaken the CCP's economic power.
This perspective aligns with the understanding of a trade war as an economic conflict where countries employ retaliatory tariffs and other barriers, ultimately increasing prices and disrupting established economic relationships.
While the use of tariffs is a common tactic in trade disputes, the framing as "economic warfare" suggests a more profound and confrontational approach to international commerce. However, economic analysis indicates that such aggressive tariff policies can also have significant negative repercussions for the country imposing them, potentially hindering economic growth and increasing the risk of recession, as some economists have cautioned regarding President Trump's trade measures.
The historical backdrop of past trade wars further underscores the potential for such conflicts to have substantial and enduring economic and political consequences, highlighting the need for careful consideration of the long-term implications of the current US-China trade tensions.
A key element of Bannon's analysis is his assertion that the current economic conflict is a direct response to decades of deindustrialization in the West, which he attributes to a "partnership" between Western financial and corporate elites and the CCP.
According to Bannon, these elites, located in financial centers like the City of London and Wall Street, collaborated with global corporations to systematically shift high-value-added manufacturing from Western nations, such as the US and the UK, to mainland China over the past 40 to 50 years.
This deliberate transfer of industrial capacity, in Bannon's view, has significantly harmed (I say “strip-mined”) the working and middle classes in the West.
Academic and economic research defines deindustrialization as a decline in industrial capacity or activity within a country or region, driven by factors such as the pursuit of cheaper labor in developing economies, the increasing automation of manufacturing processes, and the natural evolution of developed economies towards service-based sectors. Data on the US-China trade relationship from the late 20th and early 21st centuries reveals a significant surge in the US trade deficit with China, accompanied by the displacement of American jobs, initially in labor-intensive industries but increasingly in more advanced technological sectors.
This data supports the timeline and the general trend of manufacturing shifting to China, including higher-value industries, as described by Bannon. His narrative of a deliberate collaboration between Western elites and the CCP offers a specific explanation for this phenomenon, suggesting an intentional transfer of wealth and jobs for corporate gain.
However, broader research on deindustrialization indicates that this is a complex global trend influenced by multiple factors beyond just the US-China relationship, such as technological advancements that have reduced the demand for manufacturing labor in developed nations regardless of production location.
The growth of US job displacement in advanced technology sectors due to trade with China by the early 2000s suggests that China's economic rise involved more than just low-cost labor; it also entailed growing capabilities in higher-value manufacturing and technology.
Bannon delivers a strong indictment of the Chinese Communist Party, characterizing its engagement with the West over the past two to three decades as "economic war" conducted through "unrestricted warfare."
He argues the CCP is fundamentally a ruthless dictatorship that prioritizes its own power and enrichment above the welfare of the Chinese people, whom he refers to as "lao baixing". In Bannon's view, the CCP leadership operates like a "gangster" regime, exploiting state-owned industries for personal gain and engaging in the widespread theft of intellectual property… thereby enriching themselves at the expense of both Western economies and the Chinese populace.
Extensive documentation from various sources details severe human rights abuses perpetrated by the CCP, including the repression of Uyghurs and other minority groups, forced labor, pervasive surveillance, stringent restrictions on religious freedom, and coercive population control measures.
These documented abuses align with Bannon's depiction of the CCP as an authoritarian entity with a profound disregard for fundamental human rights.
Furthermore, the organizational structure of the CCP reveals a highly centralized and tightly controlled system where power is concentrated at the apex, reinforcing Bannon's portrayal of the party as a monolithic force capable of exerting immense influence over all aspects of Chinese society and its economy.
The term "lao baixing" is a traditional Chinese expression for ordinary people or commoners. Bannon's consistent use of this term to distinguish between the CCP and the general Chinese population suggests a deliberate strategy to focus his criticism on the ruling party and its actions, while potentially appealing to a sense of shared connection or historical affinity with the Chinese people themselves.
Bannon contends the current economic models of both the United States and China are fundamentally unsustainable in the long run.
He posits that the US has become excessively reliant on deficit spending, financed by the creation of new money and the sale of government bonds, a situation exacerbated by the outflow of high-value-added manufacturing to China.
Simultaneously, he argues that the CCP's economic model, which he believes is based on the exploitation of the Chinese working class and fueled by a massive and potentially collapsing real estate bubble, is also inherently flawed and approaching its breaking point.
However, analyses of the US tariffs suggest potential negative consequences for the US economy, including reduced GDP growth and disruptions to trade.
Projections from various economic models indicate that the 2025 tariffs could lead to a decrease in US GDP growth, an increase in unemployment and consumer prices, and a potential long-term contraction of the US economy. These projections offer a different perspective on the sustainability of the US economic strategy under the current tariff regime, suggesting potential risks rather than guaranteed benefits.
Bannon's mention of the Chinese real estate bubble and the absence of a robust social safety net for the general populace does touch upon widely acknowledged potential vulnerabilities within the Chinese economic system, indicating that China also faces significant challenges to its long-term economic stability.
Bannon expresses strong optimism that President Trump's imposition of tariffs will serve as a powerful catalyst for companies to relocate their manufacturing operations back to the United States, thereby boosting domestic tax revenues and generating high-value-added employment opportunities. He refers to April 2nd, 2025, as "Liberation Day," presumably marking the implementation of significant tariff measures, and asserts that the US is currently experiencing a "full embargo" on goods originating from China (the accuracy of this claim requires verification).
In Bannon's view, the United States represents a "premium consumer market," and the tariffs are essentially a mechanism to charge a premium for access to this lucrative market, with the principle of reciprocity being a central tenet of his proposed trade framework.
The high tariff rate of 145% reportedly imposed on China, along with China's retaliatory tariffs, and the broader use of executive orders to implement import taxes, align with Bannon's narrative of an aggressive tariff policy.
The significant increase in the US weighted-average tariff rate to over 20% by mid-April 2025, following the April 2nd announcement, supports the notion of a substantial shift in US trade policy around the time Bannon identifies as "Liberation Day".
Furthermore, data indicates that the average effective US tariff rate after the implementation of all 2025 tariffs reached 22.5%, the highest since 1933, accompanied by a projected significant decline in China's share of US imports. This data suggests a considerable disruption in established trade patterns between the two nations.
However, economic projections regarding the impact of these tariffs on the US economy present a less sanguine outlook than Bannon's. These projections anticipate potential job losses and an overall contraction of the US economy as a consequence of the implemented tariff policies.
Bannon enthusiastically describes President Trump's initial 100 days in office as a period of revolutionary action, particularly concerning US-China policy, border security, and efforts to address inflation. He highlights "Project 2025" and the "Center for Renewing America" as pivotal intellectual and strategic forces driving the administration's swift policy implementation.
Bannon claims significant successes during this period, such as effectively securing the US border and making headway in the fight against inflation, although these claims would necessitate independent verification.
"Project 2025" is a comprehensive initiative by conservative organizations to formulate a policy agenda and recommend personnel for a potential Republican presidential administration, based on a strong interpretation of the unitary executive theory and aiming for a fundamental restructuring of the federal government.
This aligns with Bannon's advocacy for a rapid and decisive implementation of conservative policies.
The "Center for Renewing America," founded by Russ Vought, is a right-wing think tank dedicated to promoting a Christian nationalist vision for the US, actively opposing initiatives like critical race theory and advocating for policies such as ending birthright citizenship and expanding presidential authority.
This confirms the organization's ideological alignment with Bannon's political views and its potential influence on policy formulation.
The numerous executive orders signed by President Trump during his first 100 days, spanning various policy domains including immigration, tariffs, and DEI initiatives, provide context for Bannon's assertion of rapid and significant policy implementation during this period.
Summary:
Steve Bannon's analysis of the US-China trade relationship, as presented in the interview, offers a compelling narrative of economic warfare driven by decades of exploitation and the need for radical restructuring.
He portrays President Trump's policies, particularly the imposition of tariffs, as crucial weapons in this conflict, aimed at reversing deindustrialization, countering the CCP's influence, and ultimately benefiting the American working class.
While Bannon's perspective is forceful and aligns with a particular ideological viewpoint, a broader analysis incorporating economic data and expert opinions reveals a more complex picture.
The potential negative impacts of the tariffs on the US economy, as projected by various economic models, suggest that the path forward may not be as straightforward as Bannon envisions.
Furthermore, while the documented human rights abuses of the CCP lend credence to Bannon's criticisms of the regime, the multifaceted nature of deindustrialization and the intricacies of global economic interdependence require a nuanced understanding beyond a singular focus on a "partnership" between elites and the CCP.
Ultimately, Bannon's interview provides valuable insights into the US-China trade relationship, but a comprehensive understanding necessitates considering a range of analyses and data to assess the true implications of current and future policies.
Despite their denials, China is losing the tariffs war and retreating as fast as it can
