Bannon told Bloomberg that it is the US's job to cut China out of every major market to put pressure on the Chinese government to bow to US demands on trade practices like intellectual property theft.
"He has to go all the way; it’s not a trade war, it’s an economic war they’ve been running against the West," Bannon said Friday, according to Bloomberg. "You cut off the access to the capital markets and you cut off the access to technology, they fold immediately.”
Bannon suggested that Trump’s ultimate aim is to fundamentally restructure China's economy so that it can do business with the US and other western nations.
"I don’t think Trump backs off for a second from the dispute, which is about fundamentally changing the Chinese economy so they can work with the free market economies of the West," Bannon told Bloomberg.
Bannon’s remarks came just a day after the president indicated that a trade agreement with China was unlikely to come in the near future, despite months of negotiations between the world’s two largest economies.
"I think they probably wish they made the deal that they had on the table before they tried to renegotiate it. We're not ready to make a deal. And we're taking in tens of billions of dollars of tariffs, and that number could go up very, very substantially, very easily," Trump said on Monday.