Steve Bannon on US-Asia trade: interview transcript
HONG KONG -- Steve Bannon came to public prominence after Donald Trump named him to be the chief executive of his presidential campaign in August 2016. After Trump's surprise victory, he named Bannon, seen as among his closest advisers and an advocate of economic nationalism, to the newly created post of chief strategist.
Since resigning last month in the aftermath of violent clashes between protest groups in Charlottesville, Virginia. Bannon returned to conservative news website Breitbart News, which he was running before joining Trump. Bannon spoke with the Nikkei Asian Review on Tuesday evening in his suite at the Grand Hyatt Hong Kong, a few hours after he addressed the CLSA Investors' Forum in the hotel. The following is an edited transcript.
Q: How much of a concern is the Chinese buying of U.S. technologies through inbound investments and deals?
A: I think it's a huge concern. Particularly in technology, people have to be very, very cognizant of and wary of this. I think you are getting both in the Treasury Department and the Commerce Department right now, and in both political parties, a heightened awareness that this is a situation that has to be closely monitored.
Q: And more tightly controlled?
A: Yes, definitely.
I'm definitely not on an anti-China crusade. I have tremendous respect for China. I have spent a lot of time here. I have had businesses over here. I have got a lot of friends over here.
But we clearly have to get back in balance on our trade deficit and our trading relationship with China. It's of utmost importance. It's driving a lot of the politics in the United States... It's a big fundamental issue that has got to be addressed. It's not going to be easy to address but it can be addressed.
We have had a situation that has kind of gone uncorrected with forced technology transfers [to China]. There has been basically $3.5 trillion of forced technology transfers over the last 10 years. I refer to this as kind of economic warfare. It just can't continue on.
Q: Why is TPP (the Trans-Pacific Partnership) not the answer for competing with China?
A: TPP is too amorphous. It could even be interpreted by China as maybe some sort of alliance against them and that is the furthest thing from what we want. We would rather have direct, strong relationships with trading partners.
I think it's not healthy for the U.S. to get into these broad overall agreements where we are just one small player among a number of others. TPP to me just tied us down and didn't really move the ball forward.
What the economic nationalists want in the U.S. is a strong bilateral trade deal with Japan, that we know what the terms are and that can be fulfilled, and some kind of military cooperation with the Japanese. Japan and the U.S. are very close allies. I think it's time to codify that with a strong trade arrangement
The same with South Korea. That's why there is so much interest in renegotiating KORUS (the U.S.-Korea Free Trade Agreement) because it's clearly not working for us. We want bilateral trade deals with Vietnam and with the Philippines [too].
We would much rather do something that we can control with [each] partner. TPP made people nervous because people couldn't review the documents. I think those types of things are too complicated and just don't end up working out.
What we are proposing is to have a strong bilateral trade deal with each of the partners and then also have military relationship with them.
I would like to have an even stronger military relationship with Japan [and South Korea] where quite frankly, Japan and South Korea contribute more to their own defense. We are a huge advocate of partners picking up more [costs]. That's my personal belief, that's not President Trump's or the administration's... [though] he is very blunt about what he thinks about those topics.
Q: What might the trade deal with Japan look like?
A: It has got to encompass everything. Not just agriculture, it has got to go across autos, manufacturing goods, etc. There's a lot of consternation about whether American companies can get access to the Japanese automobile market. I think that has got to be part of it. But I'm not a guy who negotiates trade deals.
Q: Do you have the sense that Japan is open to this?
A: Every indication is that they are less than enthusiastic. When Commerce Secretary Wilbur Ross came over in April, there were some preliminary discussions. I don't know how much has gone on since then, but I think we ought to make it a priority.
Q: Some critics see a conflict between moving to terminate or renegotiate KORUS at the same time there is a confrontation with North Korea. Do you?
A: It is not a conflict. Now is the time, if you are going to bring it up, you might as well bring it up now. You have a commercial relationship, you have a military relationship, and they are to a degree inextricably linked. KORUS is clearly not working for us.
The Koreans are very serious people. You can bring this up at the same time that you are having a situation with North Korea. I don't think that will stop preliminary discussions that lead to a negotiation. You have got to remember, these trade deals take a long time. They take years, right? The renegotiation of KORUS will take a considerable amount of time. Let's just get on with it.
Q: Where do you think things are going to go with North Korea?
A: I hope that the U.S. and China start working more on a bilateral basis to figure it out. I think that's the ultimate solution. Hopefully that may start with the November visit of President Trump [to Asia]. I think the logical thing is for the two principal powers in that region to discuss this face to face and figure out a solution.
Q: You have mentioned your concern with the extreme views of some university students in China. Should that be a concern of Washington?
A: I don't think it's a concern in Washington, it's a concern of mine. I happen to be someone who follows developments in China very closely. I have never heard it raised in [Washington] D.C.
The hyper-nationalism that came out of German universities wasn't tamped down, right? It looks like here there has actually been measures already taken to tamp it down, which I think is positive. I think sometimes certain situations like that can get out of control.
Q: A lot of senior Asia positions in the administration have not been filled. Does Trump have enough people to handle things?
A: We are moving with the Defense guys, we are moving forward with the State Department. He's got the team, because he has got a great team in [Secretary of State Rex] Tillerson and [Secretary of State James] Mattis but you clearly want to staff out more as quickly as possible.
We just moved forward four weeks ago before I left with [Section] 301. We moved forward on pushing [Section] 232 to get the report soon... We started [renegotiating] NAFTA. One of the big NAFTA points is point of origin, the implication is whether Chinese goods are just coming through there (Mexico) and just being assembled.
If you look at what President Trump has done already in regards to imposition of the [Section] 301 investigation, the Clinton administration, the Bush administration and the Obama administration never pursued a Section 301 investigation in regards to intellectual property. To me, that is one of the biggest things, even more than steel and other things, that is one of the things that we really have to get our arms around.
I just think it's very important. It shows a lot of bravery by President Trump. When a lot of other presidents looked at it and kind of blinked, he realized that that was absolutely central to us going forward.
The very first state visit we had was Japan. We had South Korea, we have had China, we have more Asian leaders coming to the U.S. in President Trump's first eight months than I think Obama had in his first couple of years.
Abe couldn't have been more forthright to say, 'Hey, the Obama team didn't really want to engage that much.' Remember it was Prime Minister Abe who flew over in the first couple days [after the election]. To me that is very symbolic. It shows you that people in this region understand there are huge opportunities but [also] huge issues and concerns.
I think that President Trump has been so engaged in Asia, more so than any other region of the world, and for good reason. Look, we have a huge trading partner in China [where] things are not going right, we have got to sort that out. Japan is a very close ally. It was just last week that you guys had a missile launched over top of you, right? That is when it gets to be very serious. President Trump doesn't get the credit. He is fully engaged into the Pacific and particularly Asia.
Interview by Nikkei Asian Review deputy editor Zach Coleman and Nikkei staff writers Yasuo Awai and Joyce Ho.