Steve Bannon knows how to diagnose a problem. He has the instincts of a street fighter, the rhetorical sharpness of a wartime general, and the political intuition of someone who understands power at its rawest level. Unlike the talking heads who drone on about policy in abstract terms, Bannon speaks with an urgency that makes you listen—because on many issues, he’s right.

His recent conversation with Tim Dillon was another example of these traits. Bannon didn’t mince words. China, he said, is the single greatest existential threat to the United States. Not Russia, not lunatics on the far-left, not even the deep state. China. And the only way to address this threat? Complete and immediate economic decoupling.

This isn’t new territory for Bannon. He has been beating the war drum against China for years. He was one of the first high-profile figures to sound the alarm on Chinese influence over the U.S. economy, warning that the Chinese Communist Party (CCP) has effectively turned Wall Street, Silicon Valley, and much of corporate America into willing collaborators in its long-term strategy of global economic dominance. His framing of China’s ambitions—co-opting Western elites, securing technological supremacy, and waging “unrestricted warfare” through financial and industrial means—is compelling because it contains a number of undeniable truths.

But while Bannon’s analysis is sharp, his proposed solution is a fantasy.

Decoupling from China is a nice slogan, but it’s not a real policy. The U.S. and China are economically fused in ways that make full separation not just impractical but, in many ways, suicidal. Bannon speaks about decoupling as though the U.S. could flip a switch and walk away. In reality, a sudden break would be more like an amputation without anesthesia.

American supply chains are hopelessly entangled with China. It isn’t just consumer electronics or cheap plastic goods—though those are significant. It’s critical industries. Pharmaceuticals. Semiconductors. Green energy components. The U.S. does not have a manufacturing base capable of replacing Chinese production in any of these sectors in the short or medium term. For decades, American corporations outsourced production to China because it was cheap, efficient, and—most importantly—available. That infrastructure doesn’t exist stateside anymore. You can’t wish it back into existence overnight.

Just look at Apple, which relies on a network of Chinese suppliers and factories. Even if Tim Cook wanted to move Apple’s entire production to India or Vietnam, he couldn’t do it. Those countries lack the infrastructure, workforce, and logistical capabilities that China has built over decades. The same goes for Tesla, which depends on China for everything from battery components to factory output.

And what about Wall Street? American investment firms have poured trillions into Chinese markets. BlackRock, Vanguard, and the rest of the financial establishment see China not as a threat but as a gold mine. A full economic decoupling wouldn’t just hurt China—it would collapse massive portions of the U.S. financial system. Pension funds, mutual funds, hedge funds—every institution with exposure to China would take a direct hit. The political class may pretend to talk tough, but the donor class, which holds the real power, would never allow a full separation.

Then, there’s the American consumer. Decades of offshoring have made China the backbone of affordable goods in the United States. Average Americans have no idea how dependent their daily lives are on Chinese manufacturing. If Bannon got his way, everyday products would become exponentially more expensive, triggering inflation at levels that would make the current crisis look mild. 

Again, to be clear, Bannon’s instincts about China are correct. The CCP has exploited American greed, incompetence, and short-term thinking to entrench itself as an indispensable part of the global economy. China has bought influence at the highest levels, manipulated trade agreements, and leveraged its economic power to advance its geopolitical ambitions. He’s right to sound the alarm. He’s right to push back against the cozy relationships between Chinese elites and American corporate power.

But he’s wrong to think the answer, right now, is total separation. The U.S. isn’t in a position to decouple. We are, however, in a position to negotiate better terms. The goal shouldn’t be to cut China off entirely—that ship has sailed. Instead, the focus should be on selective disengagement. Break the dependency in key industries. Regain control over manufacturing in sectors that matter most: semiconductors, energy, pharmaceuticals, and defense technology.

This means ramping up domestic production of critical goods, reshoring manufacturing where possible, and strengthening alliances with alternative suppliers like India and Mexico. It also means using tariffs and incentives strategically—not to punish for the sake of punishment, but to shift reliance gradually. It also means confronting Wall Street’s role in feeding the beast. Right now, the financial class is betting on China’s continued rise. That calculus has to change.

Bannon is right about the disease. He’s wrong about the cure. China isn’t going away. The U.S. can’t afford a clean break, and pretending otherwise is a distraction. The real fight isn’t about severing ties but regaining control.