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August 19, 2017

Donald Trump’s decision to sack White House advisor Steven K. Bannon elicited no official comment from Beijing today but it may be safely surmised that China’s leaders are fighting the urge to gloat.

Bannon, right-wing Savonarola and the man credited by many with crafting the electoral strategy that put Trump in the White House, was the administration’s most strident China hawk. He championed tariffs on Chinese imports, penalties against American companies building factories in China, and tighter restrictions on Chinese investment in the U.S.

Only days before his ouster, Bannon reaffirmed, in an interview with a left-leaning political journal, his long-held conviction that the U.S. is locked in an “economic war” with China, and boasted of plotting behind the scenes to take down White House rivals who lacked the courage to join his call to arms. American Prospect editor Robert Kuttner says Bannon initiated the interview, and in it described in detail his efforts to undermine colleagues who favor a more conciliatory approach to China. The administration’s China doves, Bannon told Kuttner, are “wetting themselves” in fear of his maneuvering.

On Friday Bannon himself ended up all wet, the latest in a parade of Trump West Wing-ers forced to walk the plank. (It didn’t help that in the interview Bannon scoffed at the idea that U.S. would ever take military action against North Korea.)

Bannon’s ouster adds to the confusion that has characterized Trump’s actions on China since he took office. As candidate, Trump berated China for unfair trade practices and promised to slap tariffs on Chinese imports as soon as he was sworn in. As president, Trump by turns has professed admiration for Chinese president Xi Jinping and decried the Chinese leader for his failure to do more to help the U.S. contain North Korea. On Monday, barely a week after China voted in favor of tough new United Nations sanctions against North Korea, the Trump administration launched an investigation into whether China is pirating the intellectual property of American firms under Section 301 of the 1974 Trade Act.

Commerce secretary Wilbur Ross, economist Peter Navarro and U.S. Trade Representative Robert Lighthizer remain to press for a harder line on China. But Bannon’s absence will embolden Treasury Secretary Steven Mnuchin, White House economic advisor Gary Cohn, Secretary of State Rex Tillerson and Trump’s son-in-law Jared Kushner who are said to fear a trade war with China could backfire and weaken the U.S. economy.

Washington Post columnist Joshua Rogin argues that with Bannon banished, those who oppose his China policies “are positioned to reassert their control over the relationship and stifle many of Bannon’s key initiatives.” That, says Rogin, “could be a boon for the status quo—and a relief for the Chinese government.”

In the meantime, this week brought fresh evidence of China’s rising prowess as the country’s two tech giants, Alibaba and Tencent, reported record quarterly earnings, prompting the New York Times to point out that the two companies now rank alongside Apple, Google, Facebook, Microsoft and Amazon as the world’s most highly valued companies.

 

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EMAIL ALAN MURRAY
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