Bashar al-Assad’s forces appear to have used chemical weapons on Syrian civilians again; Kim Jong-un’s North Korea has fired off another intermediate-range ballistic missile; and Xi Jinping, the President of China, has arrived in the United States for a summit meeting with Donald Trump. Big news all, you might think. But inside the political bubble, the main topic of conversation and speculation at the moment is how and why Steve Bannon, Trump’s senior political adviser, got booted from the National Security Council.
Some accounts portrayed Bannon’s eviction as the housecleaning work of H. R. McMaster, the three-star Army general who replaced the controversial Michael Flynn as Trump’s national-security adviser. Bannon himself tried to suggest that he had only been on the N.S.C. in the first place to keep an eye on Flynn. But there may well be more to the story than that. On Wednesday, the Times reported that “blunders by Mr. Bannon’s team—especially the first immigration order, which was rejected by multiple courts—have undermined his position” in the White House. The Times story goes on:
For students of White House infighting, dynastic regimes, and Trump’s mental makeup, there is enough material in those two paragraphs to support several interpretations of what’s happening. One is that the Crown Prince, Trump’s son-in-law, Jared Kushner, has had enough of Bannon’s right-wing-revolutionary shtick; while Cohn, the former president of Goldman Sachs, never had much sympathy for it to begin with. And Papa Don has never have gotten over the February 13th cover of Time magazine, which featured a close-up shot of Bannon and the headline “The Great Manipulator.”
Other readings could be offered, of course, and some of them may be more accurate. But the real import of Bannon’s departure from the N.S.C. goes beyond personalities and palace intrigue. It confirms a trend we’ve seen developing for weeks now: the Trump Administration’s globalists, such as Kushner and Cohn, are growing in influence, while the nationalists—led by Bannon—are on the defensive.
To most members of the Washington foreign-policy establishment, regardless of party affiliation, that will come as an immense relief. It suggests that business as usual—Atlanticism, free trade, American economic and military engagement across the globe—will ultimately prevail. Bannon has embraced an alternative vision, which he calls “economic nationalism.” Many of his critics have identified it as a desire to upend the international order that was established after the Second World War, and to replace it with a protectionist, ethnocentric model—one in which the United States, Russia, and nationalist-led European countries join together to fight Islam and confront a rising China. During the campaign, and even during the transition, Trump sometimes seemed to be leaning in Bannon’s direction. But since he has taken office, the actions of his Administration have indicated otherwise.
The first indication of what was to come occurred in February, when Trump backed off the threatening signals he’d been sending to the Chinese, which had included accepting a phone call from the President of Taiwan, a country that Beijing regards as an integral part of the Middle Kingdom. In a telephone conversation with President Xi on February 9th, Trump said he would honor the “One China” policy that the U.S. government has recognized since Richard Nixon went to Beijing, in 1972.
Kushner, whose daughter Arabella is learning Mandarin, appears to have played an important role here. According to the Wall Street Journal, China’s Ambassador to Washington, Cui Tiankai, courted Kushner assiduously—and, apparently, successfully. “Trump’s son-in-law is key,” Wu Xinbo, the director of the Center for American Studies at Fudan University, in Shanghai, told the Journal. “First, he’s our ambassador’s main point of contact with Trump. Second, he’s the main figure for passing ideas and suggestions on China policy.”
Trump has also retreated from his jarring rhetoric about NATO. In January, the President-elect told a German newspaper that the military alliance was “obsolete,” raising fears all over Europe that his Administration might revive American isolationism. But, in early March, Rex Tillerson, the Secretary of State, wrote to Mitch McConnell, the Senate Majority leader, and asked Congress to ratify Montenegro’s membership in NATO—a clear expression of support for its continued expansion. A couple of weeks later, the White House confirmed that Trump will attend a NATO summit in May, alongside Angela Merkel, the Chancellor of Germany, and other European leaders.
Trump’s approach to Syria may also be changing. In the dystopian “Clash of Civilizations” scenario that Bannon and his supporters subscribe to, Syria represents an important staging ground in the U.S.-led crusade against radical Islam, and an example of what future U.S.-Russian coöperation could look like. But the photographs of children being asphyxiated by Assad’s chemical weapons appear to have given Trump pause about being associated with the Assad-Putin axis. At a press conference on Wednesday, he said, “My attitude toward Syria and Assad has changed very much.”
The biggest turnaround has come in the area of trade. During the campaign, Trump threatened to slap import duties of forty-five per cent on China and thirty-five per cent on Mexico. He said that on his first day in office, he would designate China as a currency manipulator. These things didn’t happen. Recently, the White House has let it be known that, far from starting a trade war with Mexico, it is seeking only modest changes to NAFTA—the very NAFTA that Trump has described as “a disaster” and the worst trade agreement in history.
“According to an administration draft proposal being circulated in Congress by the U.S. trade representative’s office,” the Journal reported last week, “the U.S. would keep some of Nafta’s most controversial provisions, including an arbitration panel that lets investors in the three nations circumvent local courts to resolve civil claims. Critics of these panels said they impinge on national sovereignty.” The story went on, “The U.S. also wouldn’t use the Nafta negotiations to deal with disputes over foreign-currency policies or to hit numerical targets for bilateral trade deficits, as some trade hawks have been urging.”
It would hardly be surprising if the Administration’s evolving trade policy is one of the sources of tension between Bannon and Cohn, who is the head of the National Economic Council. Although the NAFTA proposal was circulated by the office of the U.S. Trade Representative, Robert Lighthizer, it also appeared to reflect the thinking of Cohn and Steven Mnuchin, the Treasury Secretary, both of whom are former Goldman Sachs executives (and Democratic Party contributors).
Bannon is a former Goldman banker, too, of course. But he has drifted a long way from the internationalist, cosmopolitan outlook that is common in the upper echelons of Wall Street. Although he still has a White House ally in Peter Navarro, the free-trade skeptic who is the head of the newly created National Trade Council, the globalists appear to be directing economic policy. That is certainly what the financial markets have concluded. Since the election, the value of the peso, which is widely seen as an inverse indicator of the Administration’s protectionist intent, has risen sharply.
The one puzzle—and potential hiccup—in all of this is Trump. From the get-go, there has been a glaring contradiction in his approach to the world. While his rhetoric has, at times, embraced nativism, isolationism, and protectionism, he is himself a consummate globalist. As a television celebrity and developer, his business is largely based on selling his name around the world and attracting foreign money, some of it of dubious origin, to his U.S. real-estate ventures.
The question has always been which Trump will win out: the nationalist rabble-rouser or the avatar of global capitalism? It is still too early to say for sure. But the evidence is pointing in one direction, and the outcome of the meeting with President Xi may well confirm it.