Stocks fell sharply Tuesday, with Wall Street disappointed that President Trump's threat to raise tariffs on goods from China was not a bluff.

But as with nuclear weapons, there's no weight behind tariff threats without the will to implement them, former White House chief strategist Steven Bannon argued in an interview.

He said that Monday, when Trump vowed to follow through with his tariff threat, was the most important day in Trump's presidency.

Bannon told the Fox Business Network's Lou Dobbs it's important to keep in mind that the pressure on Trump to be soft on China has been enormous.

"The IR department of the Chinese Communist Party, the Investors Relations department, is Wall Street, the lobbyists of corporate America. The pressure on President Trump has been relentless, and it's all the Fear Project," he said.

Bannon explained "Project Fear" is "that we're being told that 'if you don't actually get a deal that's just about buying more soya beans, you're going to have a collapse of the stock market and economic catastrophe.'"

Trump has stood up against that, he said.

"President Trump says, 'No! This is an economic war.' We're going to have fundamental, structural change in the state capitalism that China has," Bannon said. "China has this system of state capitalism. We are going to get changes on forced technology transfers, subsidies to state-owned industries, intellectual property. ... These are deep issues."

Bannon said Trump won the presidency because working-class and middle-class people rejected "the managed decline of our country at the hands of people like Hillary Clinton."

"These globalists and elitists were very comfortable with the managed decline, particularly vis-a-vis the rise of China," he said.

"People understand ... the factories went to China, the jobs went to China, and the opioids came in," said Bannon. "So I think that Trump understands that tariffs are more than taxes. They're more about self-empowerment of the working class."

Trump has threatened to more than double the tariffs on $200 billion in Chinese goods, beginning Friday, after U.S. negotiators accused Beijing of reneging on previous commitments.

Powerful negotiating tool

PJ Media's Michael van der Galien noted Bannon emphasized that the moves by Trump are aimed not at the Chinese people but at their authoritarian rulers, who are enriching themselves, their family and their friends.

Meanwhile, the average Chinese citizen continues to struggle and is forced remain silent under the communist dictatorship.

"In other words, American lobbyists and Wall Street investors -- who are putting pressure on Trump -- are actually helping an enemy of the American and of the Chinese people, namely the Chinese Communist Party," he wrote.

Van der Galien said he's been inclined to argue against imposing tariffs because of his belief that international free trade "has proven to be good for everybody."

But he said his views have evolved, and he sees the value as "a very powerful negotiating tool."

Further, he said, "it's been made increasingly clear that the United States has been treated unfairly by its supposed 'partners' for years."

"Other countries impose tariffs on American products -- there's a reason you see almost no American cars in Europe -- but when the U.S. talks about doing the same, they cry foul and pretend to be all about free trade," he wrote.

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