Bannon departure tips trade scales in
favor of White House 'globalists'
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[August 19, 2017]
By David Lawder
WASHINGTON (Reuters) - The departure on
Friday of Steve Bannon, the White House's top economic nationalist, will
likely tip the trade policy scales in favor of the Trump
administration's "globalist" faction, which could soften the stance
toward two of Trump's favorite targets: China and the North American
Free Trade Agreement.
But after news that Trump had fired Bannon from his post as chief
strategist, trade experts said it may take some time for National
Economic Council Chairman Gary Cohn, Treasury Secretary Steven Mnuchin
and Agriculture Secretary Sonny Perdue to start winning more debates on
Bannon and White House Trade and Manufacturing Office director Peter
Navarro were often allied in taking hardline anti-China stances over
currency manipulation, steel tariffs and other trade issues, often
opposed to Cohn, Mnuchin and Perdue, according to lobbyists who been
involved in the debates.
The Cohn-led group proved more influential in the administration's
decisions in April not to label China a currency manipulator and to
renegotiate the North American Free Trade Agreement instead of
More recently, they have pushed for a delay in a decision on the
imposition of broad steel tariffs.
With Bannon gone, "there's not a replacement for that voice in internal
debates," said a senior administration official who was not authorized
to speak publicly on the issue.
"Without Steve constantly pushing back on every policy idea coming from
the so called "globalists," it's easy to see how they could have a
chance to start winning more policy battles,” the official said.
In the short term, the trade policy trajectory won't change much, said
Derek Scissors, a China trade expert at the American Enterprise
Institute, a pro-business conservative think tank in Washington. Many of
Trump's views on trade pre-dated Bannon's arrival on his campaign in any
The U.S. Trade Representative's office announced on Friday that it will
proceed with a planned investigation into whether China is
misappropriating U.S. technology and intellectual property through
unreasonable investment rules.
Scissors said Bannon's departure will show in what decisions the
administration makes following a year-long study of the issue.
"It's about the final choices on do we go forward with these very
difficult sanctions on the Chinese or do we look to make a tradeoff on a
security issue, and Bannon would have been in the first camp," Scissors
[to top of second column]
White House Chief Strategist Steve Bannon (L) listens with U.S.
Deputy National Security Advisor for Strategy Dina Powell (R) during
a bilateral meeting between U.S. President Donald Trump (L) and
China's President Xi Jinping (Not Pictured) at Trump's Mar-a-Lago
estate in Palm Beach, Florida, April 7, 2017. REUTERS/Carlos Barria
TRUMP STILL PUSHING TO CUT TRADE DEFICITS
The struggle for influence in Trump's White House "has been
something of a battle between the finance guys and the economic
nationalists, and the most important economic nationalist just
left," Scissors added.
The offices of USTR Robert Lighthizer and Commerce Secretary Wilbur
Ross, who have been pushing for stronger trade policies to reduce
U.S. trade deficits with China, Mexico and other countries, declined
to comment on Bannon's departure, referring policy questions to the
But industry lobbyists, who have been whipsawed by economic policy
twists over trade and an ill-fated border tax proposal, were
skeptical that much would change.
Two lobbyists on the sidelines of NAFTA talks in Washington said
that even without Bannon, they will assume the status quo on trade
policy as long as fierce China critic Navarro is in the White House.
Bonnie Glaser, senior adviser for Asia at the Center for Strategic
and International Studies, said the administration's efforts to
develop an effective strategy to retaliate against China's unfair
trade practices will survive, largely because there is a widely held
view in the administration and the corporate sector that China's
trade practices are a problem.
"I doubt this effort will evaporate, though it may evolve," she
(Additional reporting by Steve Holland, David Brunnstrom and Ginger
Gibson; Editing by David Chance and David Gregorio)
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