Steve Bannon emerges as the policy maker behind Donald Trump

Steve Bannon is turning long held ideas into policy.
Steve Bannon is turning long held ideas into policy. Bloomberg

Ambassador to the United States Joe Hockey has been privately telling government ministers in Canberra for months that Australia is the best positioned country to engage constructively with the new Trump administration due to his pre-election outreach.

That statement may still be true. Yet after the explosive phone call last weekend between the President and Prime Minister, it also highlights why the rest of the world is feeling so anxious about the jolting first two weeks of the Trump presidency.

If America's close defence and intelligence ally Down Under is in the sinbin over a refugee deal, then what hope do more fair-weathered US friends have?

The billionaire businessman's brazen "America First" approach to immigration, trade and security in his initial fortnight in power has led to mayhem that is reverberating around the globe.

David Rowe

A sudden freeze on the US refugee program and suspension of immigration from seven Muslim-majority countries mistakenly led to arrests at airports of permanent American residents, caused dozens of international flights to be cancelled and set off criticism from world leaders. More than 100,000 visas were revoked as a result of the ban.

Trump lamented to Mexico's President, Enrique Peña Nieto, about his southern neighbour's failure to "knock out" some "pretty tough hombres", after berating its illegal immigrants and "unfair" trade deal. Their scheduled meeting was cancelled.

The President's top trade adviser attacked traditional ally Germany this week, alleging it manipulated the euro lower and hurt US exports.

On Thursday Trump, a strongman, warned "nothing was off the table" on dealing with Iran's nuclear program, as the US prepared fresh sanctions.

He is what he said he was

Bannon is the new face on the coveted front page of TIME magazine, alongside the headline "The Great Manipulator". It ...
Bannon is the new face on the coveted front page of TIME magazine, alongside the headline "The Great Manipulator". It asks if Bannon is now the second most powerful man in the world.

Along the way Trump had numerous cracks at China and questioned the value of the North Atlantic Treaty Organisation, a body that protects Europe from Russia.

Trump is governing just as he campaigned. He is playing to his populist supporter base. Polls out this week show a slim majority of Americans agree with his immigration restrictions.

Trump and his legion of fans in Middle America care little for the geopolitical consequences or long-standing alliances with Australia, Mexico or Germany.

The 45th President sees a zero sum-game in the international system – if you win, I lose, and vice versa.

Senate Armed Services Committee chair John McCain told Americans and Hockey on Thursday, Australia is a pivotal defence ...
Senate Armed Services Committee chair John McCain told Americans and Hockey on Thursday, Australia is a pivotal defence partner fighting terrorism in the Middle East and friend in the Asia-Pacific. AP/Wong Maye-E

The bullyboy and freewheeling approach has been in the New York real estate developer's DNA for decades.

"I play very loose," Trump wrote in his 1987 top-selling book, The Art of the Deal. "Sometimes it pays to be a little wild."

Harvard University's professor of international Relations and former top US diplomat, Nicholas Burns, says being a "maverick" and unpredictable may work in real estate, "but in my view has not worked successfully in international politics".

More complex deals

Polling from the Lowy Institute for International Policy last June uncovered the lowest level of support for the The ...
Polling from the Lowy Institute for International Policy last June uncovered the lowest level of support for the The Australia, New Zealand, United States Security Treaty alliance since 2007. David Gray

Indeed, business transactions can be executed or cancelled and the parties easily move on. Whereas the Leader of the Free World must repeatedly deal with foreign heads of state, complex third-party relationships and easily bruised egos. And hurt feelings can come back to bite.

Trump, Burns says, "needs to develop a coherent strategy, not just sound bites on foreign policy and trade".

That appears unlikely.

Already there are smoke signals that pandemonium is engulfing the White House. Chief strategist Steve Bannon, irrefutably a brilliant man in his own peculiar way, appears to have his fingerprints all over it.

Steve Bannon, a former Goldman Sachs banker, navy officer, filmmaker and arch-conservative media entrepreneur, is ...
Steve Bannon, a former Goldman Sachs banker, navy officer, filmmaker and arch-conservative media entrepreneur, is quickly emerging as Trump's top counsellor. AP

The hardline nationalist is winning the early power struggle over more internationalist and conventional Republican figures such as chief of staff Reince Priebus and, possibly, Vice-President Mike Pence.

Bannon, a former Goldman Sachs banker, navy officer, filmmaker and arch-conservative media entrepreneur, is quickly emerging as Trump's top counsellor.

Foreign allies are eager to see if new secretary of state Rex Tillerson – who Foreign Affairs Minister Julie Bishop was set to speak to by the weekend – and defence secretary James Mattis – currently on a trip to Asia to shore up alliances with Japan and South Korea – can wield some clout around the Cabinet table.

The world's second most powerful man?

Bannon is the new face on the coveted front page of TIME magazine, alongside the headline "The Great Manipulator". It asks if Bannon is now the second most powerful man in the world.

"While other advisers have tried to change Trump, Bannon has urged him to step on the gas," TIME's David Von Drehle writes in the cover story.

According to a contributor to the story, Alex Altman, Bannon wants to "unleash Trump and flip over some tables".

"They have the keys to the car now and where they take the country is anyone's guess."

Bannon is out to cut down the political elites, retreat America from multilateral institutions and come down hard on former Wall Street colleagues who caused the 2008 financial crisis and ruined the lives of ordinary American workers.

Turnbull, of course, is a well-heeled, former Goldman partner, intellectual and social moderate – qualities Bannon despises.

Bannon was seated in the Oval Office during Trump's heated phone call with Turnbull on Sunday and, unusually for a political adviser, was this week elevated to the National Security Council's principals' committee.

He was instrumental in drafting the contentious executive order that barred the entry of citizens from seven Muslim-majority countries that had been designated by the Obama administration as terrorist hotspots.

Traditional alliances undermined

Hosting a November 2015 radio show, Bannon said the "Judeo-Christian West" was at war against Islam. He has advocated for the US to withdraw from multilateral trade deals, in line with Trump abandoning the 12-country Trans-Pacific Partnership, which Turnbull also – unsuccessfully – tried to get Trump to support.

Critically for Australia, Bannon, who Hockey met on Thursday at the White House with Priebus to smooth over diplomatic relations, is a huge hawk on China.

China is Australia's largest trading partner and the US is Canberra's No.1 defence ally.

"We're going to war in the South China Sea in five to 10 years, aren't we?" Bannon said in March 2016. "There's no doubt about that. They're taking their sandbars and making basically stationary aircraft carriers and putting missiles on those."

It is no surprise, then, that Trump is making lots of threats against China on the South China Sea, alleged currency manipulation, trade and the One China Policy on Taiwan.

On Capitol Hill, there is growing uneasiness that Trump is undermining traditional US alliances, while seeking closer relations with old foe Russia. On Thursday the US Treasury slightly eased financial sanctions against Moscow.

Yet in a sign of the conflicting strategy on Russia, new US ambassador to the United Nations Nikki Haley condemned Russia's aggressive takeover of Crimea in eastern Ukraine and the renewed fighting there this week.

Apparently, she was not necessarily talking for Trump, CNN reported.

An overplayed hand

Republican and Democratic lawmakers queued up to condemn Trump's outburst against Turnbull and several telephoned Hockey to express strong support for the 76-year alliance.

Chairman of the Senate Foreign Relations Committee Bob Corker said Trump's business background may have caused him to "go straight at a problem" with Turnbull on the transfer of 1250 refugees from Papua New Guinea and Nauru.

"As opposed to dealing with the CEO of a company, you're dealing with a country and you've got popular opinion within that country," Corker said.

Nevertheless, Turnbull, a former internet entrepreneur and aggressive barrister may, too, have overplayed his hand.

When the refugee negotiations between Barack Obama and Turnbull began early last year, nearly everyone was banking on Hillary Clinton becoming president.

Trump campaigned vigorously against immigration, at one stage even threatening a "Muslim ban" before watering it down to extreme vetting of people from terrorist-designated countries. Everyone clearly knew his position, yet Turnbull took the risk of doing a deal with Obama that the next president would need to implement.

Turnbull obviously didn't take Trump's winning prospects seriously, because when he visited Washington in January 2016, the Prime Minister spoke to Clinton and Republican candidate Marco Rubio.

When the mogul shocked nearly everyone and won the election, Turnbull stuck to his guns insisting to Trump the Obama deal be honoured.

Domestic political interests

Patently, Turnbull didn't want the refugees in offshore processing centres to come to Australia and Trump definitely didn't want to contradict his campaign pledge and immigration executive order.

Both had domestic political audiences to please. It would have been embarrassing for Turnbull if the deal came unstuck.

Conversely, Trump reportedly complained in the tense phone call that he was "going to get killed" politically and accused Turnbull of seeking to export the "next Boston bombers".

Turnbull may have won this skirmish but he has exhausted huge political capital with Trump, who undoubtedly will feel the Prime Minister owes him next time.

What Trump doesn't appear to understand is that his rude behaviour against Turnbull risks losing Australian support for the US alliance.

Obama's former Ambassador to Australia, Jeffrey Bleich, says  it was a "needless poking the eye of a good friend".

"The reason this is significant is that people in Australia were already nervous about this change [to Trump]," he says.

Before Trump was elected support for the alliance was on the slide.

Polling realised by the Lowy Institute for International Policy last June uncovered the lowest level of support for the The Australia, New Zealand, United States Security Treaty alliance since 2007.

The number of Australians who agreed the alliance is "very" or "fairly" important for Australia's security dropped nine percentage points since 2015 to 71 per cent.

White House springs a leak

American officials, including outgoing vice-president Joe Biden put on a charm offensive on the ground in Australia in the dying months of the Obama administration.

Yet Trump's own White House – possibly orchestrated by Bannon – apparently leaked a transcript of his tirade against Turnbull.

A former senior US official in the Obama administration says the transcripts of conversations with heads of state are tightly held among just a few people and believes it was unlikely a career bureaucrat released sections of the document to the Washington Post.

Senate Armed Services Committee chair John McCain told Americans and Hockey on Thursday, Australia is a pivotal defence partner fighting terrorism in the Middle East and friend in the Asia-Pacific.

The latter is the precise area where Trump and Bannon want to muscle up to China.

"Australia is the southern anchor and Japan is the northern anchor," says James Clad, a former Pentagon and State Department official in the Bush administration.

Reflecting on the tumultuous Turnbull phone call, former president George W. Bush's top Asia security adviser, Mike Green, says all eyes will be on the White House visit next week of Japan's Prime Minister, Shinzo Abe, "to see if this is the exception or a new pattern".

Meanwhile, Trump told worshippers at a national prayer breakfast on Thursday in Washington the world was in trouble and he was going to "straighten it out".

"When you hear about the tough phone calls I'm having, don't worry about it. Just don't worry about it. They're tough. We have to tough. It's time we're going to be a little tough folks. We're taken advantage of by every nation in the world virtually. It's not going to happen anymore," he said.

In Trump land, they call it America First.