(Bloomberg) -- Former Trump political strategist Steve Bannon condemned a weekend truce in the U.S. trade dispute with China as a capitulation, signaling dissatisfaction among the president’s allies.
Bannon targeted Treasury Secretary Steven Mnuchin, a former Goldman Sachs Group Inc (NYSE:GS). banker, for his role in the trade talks. President Donald Trump “changed the dynamic regarding China but in one weekend Secretary Mnuchin has given it away,” Bannon said in an interview.
The Trump administration said it would hold off on tariff threats after the two nations agreed to “substantially” reduce the U.S. merchandise trade deficit with China, which last year hit a record $375 billion. Beijing promised to “significantly” increase purchases of U.S. goods and services, but there was no dollar figure attached, despite White House assurances that China would cave to its demand for a $200 billion annual reduction in the trade gap.
Trump on Monday defended the negotiations. “China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products - would be one of the best things to happen to our farmers in many years!” he said in a series of postings on Twitter. “On China, Barriers and Tariffs to come down for first time.”
“We’re putting the trade war on hold,” Mnuchin said Sunday after the two sides released a joint statement a day earlier. “Right now, we have agreed to put the tariffs on hold while we execute the framework.”
Bannon said the comment from Mnuchin, who took the lead in trade talks with Chinese vice premier Liu He, showed the Treasury secretary “misses the central point” of the economic competition.
“They’re in a trade war with us and it hasn’t stopped,” Bannon said. “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.”
A Treasury spokeswoman didn’t immediately answer a request for comment.
Bannon suggested Mnuchin’s views on trade were out of sync with Trump’s populist political base. He compared him to Hank Paulson, who espoused a pro-trade agenda as Treasury secretary under President George W. Bush.
Paulson encouraged Mnuchin to travel to Beijing for a first round to trade negotiations and Mnuchin in turn lobbied Trump to authorize the trip, said a person familiar with the matter.
“You might as well have Hank Paulson doing this,” said Bannon, who is traveling to Italy this week to meet with Matteo Salvini of the Northern League about the populist party’s electoral success.
Other Trump loyalists echoed Bannon. Dan DiMicco, a trade adviser for Trump’s campaign and transition, joined in the criticism.
“Chinese r laughing at us again,” he said in a tweet. “They have never delivered on 1 promise in the past. Appeasement is the devils friend. Now we get to export our natural resources like an island nation.Soil & Water via agriculture. Energy instead of value added Mfg products!”
