Well, there’s (more) good news on the trade front or, if you’re inexplicably still inclined to listen to Steve Bannon after he went down with the Roy Moore ship in December, terrible news.
Bannon, who suffered a stunning fall from grace late last year after comments he made about Trump Jr. (made public by author Michael Wolff) prompted a scathing rejoinder from Trump and after he refused to distance himself from accused pedophile Roy Moore (who managed to lose Alabama to a Democrat much to the chagrin of the GOP), was out on Monday bemoaning the trade truce with China tipped in a Saturday joint statement and confirmed by Mnuchin on Sunday.
“Trump changed the dynamic regarding China but in one weekend Secretary Mnuchin has given it away,” Bannon told Bloomberg, in an interview.
That is obviously bullshit, which should come as no surprise because you know, consider the source. It also echoes the divide in Trump’s inner circle between Mnuchin and Peter Navarro, who was reportedly sidelined from negotiations with Chinese Vice Premier Liu He for his behavior in Beijing earlier this month.
Basically, folks like Bannon and Navarro don’t want to solve problems. They want to create problems that didn’t exist or, if they did exist, exaggerate their effect on middle America and lay all of the blame at the feet of foreigners in an effort to bolster a nationalist message and push a poisonous agenda. When someone like Mnuchin attempts to pacify the voters who have been duped by this bullshit, it rubs folks like Bannon and Navarro the wrong way because if you solve the problem, you can’t continually use it to whip people into a frenzy or, in Navarro’s case, use it to make a name for yourself and sell books.
This leads invariably to ambiguity as to whether Trump has “caved” to China or actually scored some points by securing concessions.
For instance, on Tuesday, China followed through with a rumored move to cut the import duty on passenger cars, slicing it to 15% (from 25%) from July 1, in an effort ostensibly aimed at fulfilling Xi’s promise to open up the country’s auto market. Obviously, that’s a positive for automakers, and Jaguar Land Rover owner Tata Motors was immediately bid on the news:
Ford, GM and Tesla are likely to see gains on Tuesday and European automakers got a lift as well.
But while that sounds like a positive and while the news out over the weekend was conciliatory enough (in tone) to boost risk assets on Monday, not everyone is excited about this. In addition to Bannon, it seems that the administration’s hawkish contingent created “discord” around the negotiations and ultimately, lost the battle with Mnuchin. Here’s Bloomberg:
President Donald Trump retreated from imposing tariffs on billions of dollars worth of Chinese goods because of White House discord over trade strategy and concern about harming negotiations with North Korea, according to people briefed on the administration’s deliberations.
Some White House officials blame poor coordination among the warring factions in Trump’s economic team for the retreat, according to several people briefed on the matter. Within the administration, divisions are raw between free-trade supporters such as Mnuchin and White House economic adviser Larry Kudlow and China hawks led by White House trade adviser Peter Navarro.
The push to settle the ZTE dispute is also an important piece of this puzzle although there’s $500 million in Chinese cash involved there, so it’s kind of hard to imagine that didn’t play a role in Trump’s push to resolve the situation.
So you know, who you gonna believe? Steve Mnuchin (who is a walking, talking punchline, but who is at least some semblance of sane) or Peter Navarro and Steve Bannon, with the former having produced a documentary that features a Bowie knife with a yuan note wrapped around the handle literally stabbing America in the heart(land) and the latter being a disgraced bigot who now spends his days telling Marine Le Pen supporters to “wear their racist labels as a badge of honor”?
The bottom line here is precisely what we suggested it would end up being. To wit, from a Dealbreaker piece dated March 26:
If you’re going to send someone to Beijing you’ve got to think it’s preferable to send Mnuchin – as opposed to say Navarro (who is still building his murder one case against the Chinese) or John Bolton (who might try to poke someone with a cattle prod).
Meanwhile, Bannon is going to go down with this ship.
“They’re in a trade war with us and it hasn’t stopped,” he said, in the same Bloomberg interview mentioned above. “Mnuchin has completely misread the geopolitical, military, and historical precedence and what President Trump had done was finally put the Chinese on their back heels.”
Ok, Steve. Whatever you say. Now go back to doing whatever it is you do these days – maybe crying into a martinis at the back of a local bowling alley.