E Is Steve Bannon Doing China A Big Favor?
Does China have a better economic system than does the USA? Has capitalism become so corrupt that China's system actually is more accountable to world economic needs? Steve Bannon, now in the news for saying Huawei should be crushed doesn't think so; he could be very wrong.
Steve Bannon, who was Donald Trump's vanquished presidential adviser, is an economic nationalist. He says economic nationalism is Trump's strength and something he campaigned for. After all, Donald Trump has said in 2016, at a rally, that China is raping the USA, and other nations are hurting the USA with trade deficits. Bannon is at the forefront of this movement, having recently said that POTUS45 will never back down from his position against Huawei.
Truth is, the jury is out on whether Donald Trump believes Huawei is any more dangerous than another other cell phone company. After all, he also said he could make a deal that includes Huawei. But the idea of economic nationalism appeals to Donald Trump.
We know that Bannon wants Huawei destroyed. He said it is 10 times more important than a trade deal. I actually think that, while this would cause short term pain, ultimately it would do China a huge favor if Trump takes his advice and crushes the 5G/Smartphone company. It would make China more independent of the United States. Bannon falls back on the 1974 Trade Act, specifically sections 201 and 301, which is a US law only. That act has no international status regarding the transfers of tech within sovereign nations. Yet the government is beginning to box itself into commitment to the bad law.
But what if America's version of economic nationalism is forever flawed? Ask yourselves, are you comfortable that Amazon and GM and Whirlpool and Trump's son in law, Jared Kushner, are not paying taxes so that America is starved for taxable income and the deficits are massive? Yet we know that China collects lots of taxes and always has enough money to subsidize favored industry and agriculture.
Disclosure: I have no financial interest in any companies or industries mentioned. I am not an investment counselor nor am I an attorney so my views are not to be considered investment ...
Update 9: The Skinny Deal with China may allow more compromise with China in the future. It all depends if Trump sides with Bannon or with pragmatism. You can be sure that China will still move towards greater national independence even if the tariff wars are completely resolved. Trump has hurt the United States' position with China. It may be difficult to measure that damage going forward.
Update 8: economics tells us that free trade is best. It is! But free trade does not mean we bow to Russia or any other nation. Election interference is a crime. Trump is repeating his crimes publicly in order to numb the American people. This is right out of a totalitarian playbook. Before Trump was elected he knew election interference was the road for him. He knew he could be impeached, but calculated it would help him. He may be doubting that strategy. Meanwhile, he is asking China to get dirt on Joe Biden, likely in return for some temporary trade deal he would scuttle next term anyway. The man has to go. He is abnormal in a multitude of ways.
Update 7: Trade war is deepening. China is increasing its service sector, which is growing by leaps and bounds. China is big, with superior PPP while we are relatively small. Trump has a tiger by the tail and it doesn't look good for him.
Thanks for the updates.
Glad to update articles.
Update 6: I thought Trump did not need China which makes it so odd that he wants to talk with them again. Talk is good but it has not got far in the past. Will he impliment his plan or will he blink at a stock market crash? So far he is blinking.
Update 5: The unpredictable POTUS45 is now ordering US companies to stop doing business in China. I have been warning that this man is a fascist dictator in training but Wall Street did not listen. This dictatorial decree could cause business to split up. There are 900 US businesses operating in China. Many would change their headquarters.
Update 4: Just wondering if Bannon is feeling betrayed today. It is hard to rationalize that Trump clearly blinked today. Will he keep blinking on this silly trade war?
Update 3: It appears that Donald Trump is still firmly planted on the fence regarding economic nationalism. There is no guarantee the truce with China will hold.
Update 2: Donald Trump has, at the G20, thumbed his nose at Bannon by choosing to allow Huawei to buy American components. Trump, at least for now, has blinked, and that is a good thing for world prosperity.
Update: Even a Fox News contributor has said that China is not an existential threat to the USA. www.foxbusiness.com/.../trump-us-china-tariffs-trade-war However, Bannon and our military think otherwise. We are the biggest danger to ourselves!