US President Donald Trump will not back down from the ongoing trade war with China and make it "unbearably painful" for Beijing, former White House chief strategist and Trump's aide Steve Bannon said Friday.
US President Donald Trump will not back down from the ongoing trade war with China and make it “unbearably painful” for Beijing, former White House chief strategist and Trump’s aide Steve Bannon said Friday. Trump has been ramping up pressure on China in the last three months to reduce the USD 336 billion trade deficit in the USD 710.4 billion bilateral trade slapping three rounds of sanctions. On Tuesday, Trump slapped 10 percent tariffs on USD 200 billion worth of Chinese imports and the duties which will rise to whopping 25 percent at the end of the year. This is the third round of tariffs imposed by Trump. China for its part is retaliating by imposing tariffs on a range of US exports.
Trump also alleged that China had been unwilling to change its unfair trade practices and the new additional tariff structure would give fair and reciprocal treatment to American firms. Trump’s strategy is to make the trade war with China “unprecedentedly large” and “unbearably painful” for Beijing, and he will not back down before victory, Bannon told the South China Morning Post in an interview.
He said the aim is not just to force China to give up on its “unfair trade practices” but the ultimate goal was to “re-industrialise America”, because manufacturing is the core of a nation’s power. Trump would “never back down in the trade war (with China)”, even though the president anticipated the policy would face “massive resistance domestically and internationally”, he said. The Trump’s aide also took aim at the “Made in China 2025” plan – an attempt by Beijing to catch up with the West in 10 key technology sectors, saying China was using generous government support to reduce its reliance on the West for future technology. Bannon, who claimed to have helped Trump draw up the trade war plan, said that in the past, tariffs had been limited to imports of between roughly USD 10 billion and USD 30 billion but the sheer magnitude of the more than USD 500 billion in question this time had “caught Beijing off guard”.
“It’s not just any tariff. It’s tariffs on a scale and depth that is previously inconceivable in US history,” he said. He said Beijing had relied on “round after round of talks” to take the momentum out of the US punitive measures, but the delaying tactics would not work. “They always want to have a strategic dialogue to tap things along. They never envisioned that somebody would actually do this,” he said.
He and Trump were convinced the US would win – and there were signs the Chinese elite were too, with “so many senior Chinese officials exhausting all channels” to move their money out of China and into real estate in San Francisco, Los Angeles and midtown Manhattan. “Why (does there have) to be massive capital controls placed on Chinese money? Otherwise all will flee to midtown Manhattan. They want to buy real assets in the US.
That shows you a dramatic lack of confidence in their own economy,” he said. Bannon, who left the Trump administration after a tumultuous seven-month stint, said trade had always been at the top of Trump’s campaign strategy.