MICHELLE CARUSO-CABRERA: We'll get to that in a second. Hold on one second. Fine? "Fine" is a strong word.

STEVE BANNON: No, "fine" is actually a weak word.

MICHELLE CARUSO-CABRERA: Fine I think is a strong word to describe it, right? Really, fine? I saw him in Singapore, and he was very much in command.

STEVE BANNON: Command presence.

MICHELLE CARUSO-CABRERA: And he was not in command on Monday. I mean, that wasn't a fine performance. You really think that?

STEVE BANNON: It's -- Singapore and Helsinki are two different things. Like I said, I think it was fine. I think the hysteria that came -- look, was President Trump in his normal command presence? You could argue yes or no. The topics they discussed and I think the output they were getting now, particularly vis-a-vis China, what the President is talking about I think is quite strong. I think what he's done versus other presidents -- look, he goes to Warsaw last year. He gives a speech that he talks about the central part of his administration is defense of western civilization. And he says at the time -- he calls them out for the natural gas deal, a natural gas deal they're going to do with the Germans. Now, any other president, that would have been the most provocative thing in the universe. And look at what the last two presidents did vis-a-vis Russia, right? We've allowed -- the American foreign policy for 50 years or 60 years was to keep Russia out of the Middle East. Obama allowed that. You know, Bush looked the other way. You know, Brennan and all these super patriots, they are the first to throw treason at the President. You know, where were they when they were on watch about this, okay? President Obama actually stood down. I think his cybersecurity guy testified to the Senate Committee that he stood down. So I don't know where all these super patriots were. And look at what Donald Trump's done. Now, was his command presence as strong as it was in Singapore? The answer is certainly, no. And I think you would say the same thing. But it's a different environment. He's dealing with a different guy.

MICHELLE CARUSO-CABRERA: What about --

STEVE BANNON: -- No, but here is the point. The mainstream media jumps on the marginal optics, and they're right on the trigger. “It's treason, he didn't support the intelligence community. Let's talk about the intelligence community.” You know, all these super patriots, Clapper and Brennan and his crowd, that were jumping on the President because -- and the President sometimes conflates, you know, the enabling aspect with the collusion. Okay?

MICHELLE CARUSO-CABRERA: He always conflates that. When he's asked about the meddling, he automatically jumps to the accusation of collusion.

STEVE BANNON: The Financial Times in London had on the front page that they conflated the two, right, the meddling and the collusion. So a lot of people do it. They're two different things. And certainly, the meddling is wrong. We ought to monitor it. They shouldn't do it. We should tell them to shut it down. But President Obama kind of stood down. Those guys are on watch, really didn't get on it. The indictment on Friday -- which President Trump said, “Hey, go ahead and put the indictment out, I don't have a problem with it.” The indictment on Friday didn't even talk about the RNC or the five or six campaigns that the Russians went after. And let's be frank. If Clapper's book -- he's saying, “Hey, it changed the election.” I think it was, what, $100,000 worth of Facebook ads? Give me a break. The meddling was on the margin, okay? And the collusion, they haven't found one shred of evidence. The Democrats wanted a do-over. They have yet to embrace the reason they lost. The reason they lost is they forgot about the working men and women in this country in Wisconsin, in Michigan, in Pennsylvania, Ohio, Iowa, places Donald Trump never should have won. And they’ve -- they wanted a do-over from 2:30 in the morning on the 9th of November of 2016 when we won, when AP called us a winner, they've wanted a do-over. And they've whined and they've bitched and they've moaned about it since then. And they're going to have a do-over this November. November 6th they get their do-over.

MICHELLE CARUSO-CABRERA: We're going to get to the midterms in a second. Would you have advised him to go to Helsinki, would you have advised him to sit down with Putin, if you were still at the White House?

STEVE BANNON: The timing -- I thought that the NATO visit, the visit to the United Kingdom and the visit to NATO could have taken place on November 7.

MICHELLE CARUSO-CABRERA: After the midterms?

STEVE BANNON: There's plenty to do there. There's plenty that you have to do. I thought his trip to NATO was fantastic. We can get into that in a second. Talking to our allies, trying to save NATO. Donald Trump's done more than any other President of the United States; not to have happy talk but to actually to try to save NATO and make it a real alliance, not a protectorate. All of that could have waited. We could have waited until after November 6. They wanted to do it, fine. It's going to be fine. The deplorables will be plenty jacked up. We'll get there in a second. But that visit, if you take the whole totality of it, look at what he did with NATO. I mean, Donald Trump is trying to save this alliance. What he doesn't want is a protectorate. Remember, the problem we've got ourselves in, in this liberal post-war, rules-based order, and if you go from Europe to the Persian Gulf to the South China Sea to Northwest Pacific, it's a series of commercial relationships, capital markets, trade relationships, and American security guarantees. We underwrite the whole thing. If you want to know why we have a structural deficit of a trillion dollars a year, it's because we underwrite the entire thing. None of our allies kick into the till. And the Europeans are the worst. And Germany is the worst of the entire lot. So they can't sit there and tell me what a big threat they think Russia is when 15 percent of the German people don't want to pay 2 percent. Now this is what is very important about NATO. Trump goes over there, and he's been talking to Stoltenberg, the Secretary General, the entire time. And Stoltenberg has said that Trump is the biggest reason we now have people pitching -- putting in. That 2 percent, originally supposed to be 2024. Trump as a business guy, says, Hey, it's got to be 2 percent, it's got to be now because we're spending essentially a trillion dollars. I know it's 800 billion, but a trillion dollars.

MICHELLE CARUSO-CABRERA: And now he wants past-due interest. And he's --

STEVE BANNON: And says, like a landlord, Hey, if you don't make the 2 percent, you've got to pay arrears. And they're going crazy. Heed his logic now. The readiness initiative that Trump initiates to say what's the interoperability, you know, where is the equipment, because Trump looks at the numbers under the hood. He says, Hey, this 1.2 percent they're paying. The use of proceeds is on global warming, healthcare, where is the equipment, where is the interoperability? Germans have 128 combat aircraft, 78 airborne. Germany can put up one brigade of combat troops. So he says, Readiness initiative. He comes out of the afternoon meeting. He says, Hey, how about this, 2 percent now and -- no ten years, now. And 4 percent total? We're at 4 percent. We can't continue this. And here's the reason. We're not an empire. We're looking for allies. We're not looking for protectorates. Europe is a protectorate right now. What Donald Trump is trying to force them to do by having a partner’s conversation is to say you've got to be a partner. You have to be in on this thing. And so -- and I think it's very logical. And you've seen a lot of the globalists over there kind of push back on it, but I think Trump has been the guy that's trying to save this alliance.

MICHELLE CARUSO-CABRERA: I want to exhaust Helsinki because then I want to get on to China.

STEVE BANNON: Okay. By the way, Helsinki, and the Stoltenberg breakfast -- let's go back to the breakfast. With Stoltenberg, he's lighting Stoltenberg up in the morning. Right? He's saying, you know, You're not paying 2 percent. He says, You're the best thing. Then he starts talking about the natural gas deal. He said if they sign the natural gas deal, they can have 70 percent ultimately control of their energy. And he says, Well, we trade with Russia all the time. And Trump says, It's not about trade. This is about geopolitics. And remember, Merkel never wanted to bring that up when this deal was going. So he is so hard, from an alliance point of view, vis-a-vis Russia, the hardest I've seen since I was in the Pentagon back in the '80s.

MICHELLE CARUSO-CABRERA: So explain this to me then.

STEVE BANNON: Yeah.

MICHELLE CARUSO-CABRERA: I think he likes Putin. It appears to me he likes Putin.

STEVE BANNON: I think he gravitates to personalities that are strong personalities. He likes President Xi; he likes Erdogan, who I think is the most dangerous guy in the world; and I think he's attracted to Putin because I think he looks at those people as strong leaders of countries. They're nationalists, they put their countries first, and they get on with it and they don't care what other people think.

MICHELLE CARUSO-CABRERA: Does it bother you he's attracted to those people?

STEVE BANNON: No. It doesn't.

MICHELLE CARUSO-CABRERA: Why not?

STEVE BANNON: I'll tell you why. Because he's got his own house style. If you look at what he does, he leads from strength. Okay? People criticize, oh, this guy doesn't know what he's doing, doesn't understand this. If you see what he's doing around the world, to reorient this rules-based, post-war liberal order that cannot continue on and is essentially worked to deindustrialize the United States, it's on the backs of the deplorables. They're the ones that pay the taxes to underwrite it. And it's their kids in the Hindu Kush; it's their kids in the South China Sea; it's their kids in the 38th Parallel. That's the deplorables speaking. And I think Trump has a very strong vision of what America first means. This is the other thing about engagement, you know, all the liberals and all the guys on Morning Joe every day talk about isolationism. Only he's the least isolated President ever. If you look at not just the inaugural address, if you look at the Riyadh Summit where we actively engaged our allies, our Sunni Arab allies, particularly in the Gulf, and then if you look at the Warsaw speech, which to me was one of the most provocative speeches against Russia ever, I think that this guy is the last thing of being an isolationist. In addition, I think we have to keep Russia in perspective. Russia's an annoyance. China is our great challenge, as you've heard today with folks talking about China. Russia's economy is the size of what, Texas or New York State? It's what, 70 percent dependent on natural resources. It's got lots of nuclear weapons. But in today's modern warfare, okay, when you talk about cyber, you talk about information warfare, economic warfare and kinetic, guns up, nuclear weapons have taken less and less of an important role, in the reality of what warfare is. And so I think Trump puts it in perspective. And I think that's what he's doing -- what he's trying to do is end the Cold War. Okay? He's trying to end the Cold War. The great geniuses of both political parties blew an opportunity in the 1990s to bring this thing to an end, and we've had to pay a price for it every since then. What Donald Trump is trying to do is end the Korean War in the Korean Peninsula and end the Cold War. And all he's getting is grief from the globalists.

MICHELLE CARUSO-CABRERA: Let's talk about China.

STEVE BANNON: Okay.

MICHELLE CARUSO-CABRERA: We've talked about China all day, about whether or not there's going to be a trade war. What we see happening, game this out for us. Where does this go? How does it end?

STEVE BANNON: We're not -- this thing of a trade war, they've been in a trade war with us for 25 or 30 years.

MICHELLE CARUSO-CABRERA: I've heard that.

STEVE BANNON: We're at war with China. Ray Dalio, he tweeted it the other day. We're at war with China. There's three types of war, the Chinese look at it: Information war, economic war, and guns-up kinetic war. They're at -- been at economic war with us for 25 years. The -- no great power in world history has ever looked away of the greatest threat and at the same time dissipated its energy on something -- we spent 7 trillion dollars. Brown University, the Watson Center, showing we spent 7 trillion dollars in 17 years on this war on terror and the war in the Middle East, right, with very bad outcomes. And we've allowed the rise of China. In fact, many people in this room, the elites of our country, have exacerbated the rise of China. And we were told time and time again until Donald Trump got here that it was the inexorable rise of China. It was the second law of thermodynamics. This was a law of physics in the natural world. In fact, the whole Thucydides Trap concept that Kissinger and these guys came up with is based on the rising power and declining power. We're the declining power. That's the same theory they had before Ronald Reagan got here in the 1970s, that Russia -- the Soviet Union was on the rise, and we were on decline. That was what Détente was about. That was what all the arms agreements were about. Ronald Reagan changed that and said we can defeat these guys. We can bring this down. And it was supposed to be 40 years; it happened in 8 or 10 years. Same thing with Donald Trump. He's mocked and ridiculed of not being some foreign policy expert. He's got enough understanding of the world and the way the world works to go after this. And, quite frankly, we're winning. They talk about the Chinese haven't come back to us with a response on the trade thing. For the first time in the last 25 years, they don't know what to do. They're seeing an opponent that's standing up for themselves. It's not just the trade. The trade is -- it's the scale and depth of the trade. And the way Trump proposed it, he says, it's 50, it's 200 -- it's supposed to be one, it's 200; and it's another 200 if you retaliate. And, by the way, if you even retaliate again, it may be another 500. Now, he's talking about right now half a trillion dollars. That's just one. The 301s is what Silicon Valley came to us about. It's not the technology theft; it's the forced technology transfers. The third part is the ZTE where we can basically implode these companies alliances and --

MICHELLE CARUSO-CABRERA: I'm trying to game this out. So --

STEVE BANNON: Here is the game. Right now, right now, we're converging on a point, and they understand this. We can take the whole thing down. We could take -- the whole thing is built on a house of sand.

MICHELLE CARUSO-CABRERA: What if they sell our treasuries? What if they devalue their currency? They can do a lot of things.

STEVE BANNON: They are just going to flood more dollars out. They got $3 trillion of reserves; and trust me, in a New York second, that thing would flood out of the country in a second. That's what their own people think about their economy. We've allowed these guys to push us around. We've allowed these guys to take the South China Sea -- when I was 22 years old as an Ensign JG in the Navy, it's central of the South China Sea to be free and open navigation. The Bush administration and the Obama administration looked the other day [sic]. When they militarize it, it's Donald Trump --

MICHELLE CARUSO-CABRERA: I hear that, but I want to talk about where the trade war is going.

STEVE BANNON: By the way, I think --

MICHELLE CARUSO-CABRERA: How does it end?

STEVE BANNON: How --

MICHELLE CARUSO-CABRERA: So you --

STEVE BANNON: How it ends is in victory. How it ends is in victory. Donald Trump is not going to back off this. The Chinese are going to blink. Right now --

MICHELLE CARUSO-CABRERA: What is victory?

STEVE BANNON: Victory is when they give us full access to their markets. Victory is when they stop -- remember, the warlord-ism in China right now -- and Xi is under I think tremendous pressure -- is the state on industries. Remember, mainland China in 2025, they told us it was to leapfrog us and to converge on advanced chip design, robotics and artificial intelligence to converge eventually with genetics to converge on advanced manufacturing. What the reality is, as we saw in GTE, is to get off the west supply chain --

MICHELLE CARUSO-CABRERA: ZTE?

STEVE BANNON: ZTE. -- get off ZTE, was to get off the west supply chain for components. I think the number one thing you're going to see out of the trade war is the reorientation of the complete supply chain of Japan, Western Europe and the United States and Southeast Asia that 800 million people -- even before you get to India, okay -- around the freedom-loving countries. I think the regime in China is in deep trouble. Remember, this is different than the Chinese people. The Chinese people are some of the hardest working and best people in the world. It's this regime that has led them down this path, and it's this cult of personality around Xi that tried to get up in the United States's face.

MICHELLE CARUSO-CABRERA: Can I interject here? --

STEVE BANNON: This trade war is going to end in victory. And what you're going to see is a reorientation of the entire supply chain out of China.

MICHELLE CARUSO-CABRERA: We discuss it in far simpler terms on CNBC frequently. When it's all said and done, are there going to be fewer tariffs in the world? Is China going to be more open, or is it going to be --

STEVE BANNON: Let's go back to the G7 for a second. It's just not tariffs out there. G7, on the first day, he got lit up, right? Lit up everybody. The worst guy in the world, they're over, bending over the thing. The next morning he walks in there, says: Hey, I've got an idea. How about this idea? How about no tariffs? No tariffs whatsoever. Raw trade, reciprocity, no tarrifs --

MICHELLE CARUSO-CABRERA: Larry Kudlow brought that up this morning.

STEVE BANNON: Hold on. -- but no subsidies. Macron didn't know what to do, couldn't get out of his seat. Look, their whole scam is their state on industries. Brexit in 2016 are inextricably linked. What links them is China. It's China's exporting. It's deflation and Chinese exporting. They're exporting -- its excess capacity that has gutted the Midland heartlands of England, obviously through Germany, and gutted the Upper Midwest of the United States. If you go out to the Midwest and you give them a fire-breathing speech on China, you don't have to get them up to speed like you do the elites in New York. They understand it. J. D. Vance, who wrote Hillbilly Elegy, reminded me that these studies from MIT and Harvard showed there's a direct correlation between the factories that went overseas, the billets and jobs that went with them and the opioid crisis.

MICHELLE CARUSO-CABRERA: Can I ask you this --

STEVE BANNON: Remember, tariffs are not just about economics and they're just not about manufacturing jobs. It is about self-worth and identity and people understanding they have jobs, okay? This is bringing these manufacturing jobs back --

MICHELLE CARUSO-CABRERA: So tariffs are good for the economy?

STEVE BANNON: 100 percent good for the economy. They're great for the economy. It's going to rebuild our economy. It's going to bring our manufacturing base back.

MICHELLE CARUSO-CABRERA: Another question, I'm sorry.

STEVE BANNON: I know. Talking to an audience like this that is steeped in this radical idea, it's a radical idea of free trade. Free trade is a radical idea. It's always been a radical idea. Because what you do is you gut your country. The people in England knew that when they were a great mercantilist power. And we're up against a mercantilist power.

MICHELLE CARUSO-CABRERA: Let me ask you this. I think I -- there was a time I thought I would have automatically known the answer to this question. But now that we sit here, I'm not sure. When it comes to dividing a nation's resources to do the most good for the most people, what's better, the market or the government?

STEVE BANNON: Well, I think -- I think it's a market that is -- has some oversight by the people. Not just -- I'm not a Libertarian. I just don't think the market always has the right idea, and I don't think creative -- I'm not a believer in creative destruction. Listen, this is where the cheat is. Why does everybody want to get their cash? Why is the dollar strong? Why do the Chinese want to get their cash over here? Why does everybody want to go to the safe haven of the United States, our government securities, invest in this country? It's the stability and the safety and the security. It's the firemen, the cops, the soldiers, the sailors; the people that coach our Little Leagues, that build our churches. That's civic society. Build upon a manufacturing base; not a service base, a manufacturing base. That has been treated as a free resource. You know why the deplorables are so angry? Because they're rational. They understand that their pension funds and their life insurance companies, their savings was the same money that went overseas and shipped those jobs overseas --

MICHELLE CARUSO-CABRERA: But, Steve, you --

STEVE BANNON: -- and destroyed -- hang on -- destroyed their lifestyle. That's why you have the opioid crisis. The safety, the security, the stability of these markets --

MICHELLE CARUSO-CABRERA: If --

STEVE BANNON: -- of the United States has a cost to it. It's not free, and it's treated as free.

MICHELLE CARUSO-CABRERA: If we go back in history, I think all those elites that you talk about did not expect the outcome that we've gotten today, where China is. The idea --

STEVE BANNON: I disagree with that totally. They were dead wrong.

MICHELLE CARUSO-CABRERA: The idea was we will bring China into the world economy, they will join the WTO, they will liberalize it over time. The 400 million people that emerge from poverty because they added more market liberalizations to their economy will eventually lead to the other billion coming out. They're going to have --

STEVE BANNON: Democracy.

MICHELLE CARUSO-CABRERA: -- they're going to have less bureaucracy and more democracy.

STEVE BANNON: Yes.

MICHELLE CARUSO-CABRERA: I mean, that was their vision, right, that was --

STEVE BANNON: That's the same elites that control our country today. It's the same guys on Morning Joe. And a great power does not get to be that dead wrong. That is absolutely 100 percent dead wrong, and anybody that tries to --

MICHELLE CARUSO-CABRERA: They were lying? They changed their mind? What?

STEVE BANNON: No, because they don't look at China. China's been around for 4,000 years. They treat us as a barbarian -- as a tributary state. This is barbarian management 101. It's the reason Korea is a vassal state to them. The first trip that Kim took, he went on the train, he went to the home office and got instructions. That's why Pompeo didn't meet with him last week. President Trump said it. President Trump said, Now I understand that in dealing with Kim, you're actually dealing with China, which is absolutely the case. They look at us as a tributary state. They ship us high value-added manufacturing goods. We ship them, you know, soybeans, cotton, you know, wheat, corn, natural resources. We are Jamestown to their Great Britain. And the people that made that mistake, that's not a small mistake. Great powers don't get the opportunity to make those mistakes. We allowed them to make it, and now they're all the Thucydides Trap. The two times -- all those guys are gone. You have the rational apologists today, and you have the hawks. And the rational apologists say it's Thucydides Trap. We're the declining power; they're the rising power. The same scam they sold it, and if we're smart as a declining power, guess what? We can nudge these guys as junior partners to their better selves, and the world will be better. And we'll make it as a junior partner, but we'll be a junior partner. Okay? The hawks disagree with that. They want to be a hegemonic power. Xi showed his hands over the last five years. It's time to confront them. This is all people are going to think about in 100 years when they look back now is the confrontation of the West with China, Iran, and Turkey. That access is the dark valley. It's just like the 1930s. We're going to go through a dark valley, okay, a dark valley, and we have to be able to manage this.

MICHELLE CARUSO-CABRERA: In this country, the economy -- I mean, are you talking about a 1930s depression?

STEVE BANNON: No, no, I'm talking about a geopolitical crisis that we have the Donald Trump in reorienting this liberal post-war order where it's in the vital national security interest in the United States, it's in the vital national security interest of our local partners. That's why NATO's got to step up. That's why in the Gulf he went to Riyadh and said, Hey, we've got to be allies against Iran.

MICHELLE CARUSO-CABRERA: How much are you talking to the President?

STEVE BANNON: I talk to the guys in the White House all the time. But with the President, I make sure we go through lawyers.

MICHELLE CARUSO-CABRERA: Okay. But how often is that?

STEVE BANNON: It's -- these investigations, and, you know, the Muller investigation is going to come hurtling to a -- to a climax very --

MICHELLE CARUSO-CABRERA: I want to know how much of what you say you say to the President as well?

STEVE BANNON: You have to -- you have to deem that by his actions. President Trump is a populist. President Trump is an economic nationalist.

MICHELLE CARUSO-CABRERA: What does that mean? What does economic nationalism mean?

STEVE BANNON: Economic nationalism is very simple: It doesn't matter your race, your religion, your gender, your ethnicity, your sexual preference -- doesn't matter anything about that. If you're a citizen of the United States, you're getting a special deal. We're going to limit mass illegal immigration so we don't suppress the wages of Hispanic and black working class, and we're going to cut and dramatically limit legal immigration so our citizens can start getting value-added jobs, particularly in Silicon Valley. To be an economic nationalist --

MICHELLE CARUSO-CABRERA: You really believe that would happen? I think those jobs would actually move. I don't think that they would stay here.

STEVE BANNON: By the way, if you're going to move, then -- this is my point. This is the safest environment in the world to invest. There's a cost to that. This is a safe environment because you have working-class people that support this country. You have people that build the --

MICHELLE CARUSO-CABRERA: You're saying they shouldn't move those jobs, but that doesn't mean they won't.

STEVE BANNON: Well, let's say this. Maybe there's a penalty for moving those jobs. The day of just having it being a total freebie are over. This is a -- the world is a dangerous place. People sit there and pontificate about: I'm going to move my capital here; I'm going to move my capital here. I'm going to do this; I'm going to do that. The world is a dangerous place.

MICHELLE CARUSO-CABRERA: How are the midterms going to go? Are the midterms going to be hurt by what happened in Helsinki?

STEVE BANNON: No, the midterms are -- it's an up-or-down vote on Donald Trump. This is a referendum on Trump. If we run -- they don't want to talk about impeachment now because they understand if we talk about impeachment, this is all about getting --

MICHELLE CARUSO-CABRERA: If the Democrats talk about impeachment?

STEVE BANNON: Yeah. The election here, by the way, it's going to be just like '16. They got what they wanted, a do-over. It's going to be Trump versus their field. Okay? And he's already blew up Elizabeth Warren the other day. It's a referendum on him. He's going to be on every ballot. You know, the deplorables are going to have to -- sometimes there's going to be a moderate guy running for the Senate. Doesn't matter. This is all about -- it's an up-or-down vote, the entire Trump package, the tax cut. The economy, that I think the Fed is going to say in the second quarter is 4 percent. I think you can see an economy that grows here 3 and a half to 4 percent for the year because of economic nationalism. Because of jaw-boning. That's why investments coming back into this country.

MICHELLE CARUSO-CABRERA: What is going to happen with the House? What's your prediction?

STEVE BANNON: Right now I think the House is net loss of 20 seats if we continue to run Trump versus the field. If they try to break it up and go Congressman by Congressman, it could be catastrophic. They do not want to face Donald Trump. If we make this a referendum on Donald Trump and his policies and his totality versus his impeachment, we'll hold the House to under 20. And I think we're going to pick up two, three, maybe four seats in the Senate.

MICHELLE CARUSO-CABRERA: How are you trying to influence midterms? What are you doing?

STEVE BANNON: I've got a foundation. And right now we run a war room. We're doing a -- I've got 25 people. We're putting people up on TV every day. We're doing messaging every day. Eventually, come later in the summer, we're going to start helping groups do ground game. This is all about ground game. Their base is enormously enthusiastic and they should be. Trump triggers these folks, okay? And they now start to understand as we're deconstructing the administrative state, and you're taking -- you're changing the federal judiciary with 140 judges that Mitch McConnell did, you know, keep for Trump to fill. And these Supreme Court justices that are focused on the Chevron exemption and focused on deconstructing the administrative state, they understand. Smart progressives understand that Donald Trump is a historical figure, he's transformative, and he's going to be in their lives 30 and 40 years from now. So they're all out to impeach him now.

MICHELLE CARUSO-CABRERA: Is there anybody in the democratic field -- who would you most fear he could lose against when he runs for re-election?

STEVE BANNON: Okay. So -- don't worry about -- you've got to worry about this. Forget 2020.

MICHELLE CARUSO-CABRERA: Why?

STEVE BANNON: It's all now.

MICHELLE CARUSO-CABRERA: I --

STEVE BANNON: No, no, no. But here's what he's going to do.

This is a presidential re-elect. This is his first reelect. Here is the strategy. All of those folks need 2019 to get their sea legs, okay, just like Trump needed '13 and '14 to get his sea legs, okay, and even part of '15. You need that year to get your messaging and understand that the bright lights are on you. It's incumbent upon us to draw out Kirsten Gillibrand, Cory Booker, Jamila Harris, [sic] Elizabeth Warren. They've got to be drawn out now. He's going to draw them out now. We've got Donald Trump. Who do you have? You saw it the other day with Elizabeth Warren. He blew up Elizabeth Warren at that rally the other night in Montana, and you're going to see that every time. He's going to call out these people by name. You have to take the top contenders, force them onto the battlefield now and show us what you've got. We've got Donald Trump. Show us what you've got.

MICHELLE CARUSO-CABRERA: Who is the biggest potential foe? Is it Joe Biden? Is it Elizabeth Warren?

STEVE BANNON: I've said from day one, I think that -- I think Trump will win in '20. He'll win this year, he's going to win again in '20. The foe I think is -- the biggest is Oprah.

MICHELLE CARUSO-CABRERA: Really?

STEVE BANNON: Yeah.

MICHELLE CARUSO-CABRERA: Why?

STEVE BANNON: Because I think we've entered with Obama and Trump. I think we're in a different era. I think we're in an era that media and understanding media and understanding how to communicate on a mass basis to the American people is so much more important than being in a state legislator.

I think that we're seeing those days where even guys like The Rock -- you may laugh at that. Remember, people mocked and ridiculed Donald Trump. And so many of you that knew him mocked and ridiculed even the idea. Putin the other day, what did he say? The guy was a construction executive and ran organized beauty contests. That was Putin that said that from the podium. He said, I didn't take this guy seriously in '15 when he came over.

MICHELLE CARUSO-CABRERA: You don't believe that, right?

STEVE BANNON: I know he's looking. But my point is that so many people mocked and ridiculed Donald Trump. Top of the escalator, he's in 7th place on June 16th; after the speech, he's in 1st place. There's people like that on -- the Mark Cubans of the world, the Oprah Winfreys, the Rocks. Don't dismiss people today that are either executives that understand media or people that are media types. And people that are commenters on TV shows, don't -- the Joe Scarboroughs of the world. Do not think that those people can't somehow start to get traction, more so than some guys in the U.S. Senate. These senators -- I'm telling you, look at -- you're going to see Kamala Harris, Kirsten Gillibrand, Cory Booker and Elizabeth Warren and Joe Biden. They're all going to get their shot this November, and Donald Trump will blow each one up individually.

MICHELLE CARUSO-CABRERA: Lightning round, because we're running out of time.

STEVE BANNON: Okay.

MICHELLE CARUSO-CABRERA: Facebook?

STEVE BANNON: Font of all evil -- no, they've got -- I mean, give me a break. I mean, the guy, his senate testimony -- look what he's done. I'm a strong proponent -- I've said this now for nine months other than in speeches. Google, Facebook, we should drop down the data into public trust. Okay? Other companies should get access to it. People should opt in or out. They have to pay. It should be full-price discovery on the cost of these things. They ought to pay for Facebook, pay for Google, pay for all that, but the data itself will be in a public trust, and -- hang on. We cannot -- the convergence of the power of these companies, these tech companies, with crony capitalism in DC is scary, and they've got to be broken up.

MICHELLE CARUSO-CABRERA: Bitcoin.

STEVE BANNON: It's -- I think -- no. The point of central banks is to base your currency. I think these crypto currencies have a huge aspect in the future. Obviously, today there's problems about the markets, problems about what it's used for.

MICHELLE CARUSO-CABRERA: We know you like, but --

STEVE BANNON: I like Bitcoin.

MICHELLE CARUSO-CABRERA: You've got Ethereum? What have you got?

STEVE BANNON: No, I've got that and I'm working on a number, I think 90 percent of the ICOs have been a disaster. We are working on some tokens now, utility tokens, potentially for the populist movement on a worldwide basis. But they have to be quality. The problem is there's been too much -- too many investors I think have been blown out by things that are not thought through.

MICHELLE CARUSO-CABRERA: Ivanka --

STEVE BANNON: But they're the future.

MICHELLE CARUSO-CABRERA: Ivanka-Jared.

STEVE BANNON: Remember, it's not about personalities. On the campaign we got along great. It's just that Ivanka and Jared -- look, I respect them for this. They are progressive Democrats and globalists. And Ivanka loves her father and tries to protect her father and does a great job in the way she does it. I was there for one reason. I'm a populist and I'm a nationalist. And if people are going to try to fight those policies internally, I don't mind a knife fight. Right? I just don't mind it. I'm there to win.

MICHELLE CARUSO-CABRERA: --

STEVE BANNON: John Bolton is a good man. John Bolton is a good man, solid. I think here's what Trump's done that's very important. I think he's moved General Kelly off to the side. He's running the White House now like he ran the 26th floor at Trump Tower. He's very comfortable with that.

MICHELLE CARUSO-CABRERA: And that's good thing?

STEVE BANNON: I think it's positive. Because, at 71 years old, you have a house style. You have a style how you're prepared to roll. At Trump, he had five or six people, direct reports to him. That's what he has today: Steven Miller, White House Counsel, Bolton, Larry Kudlow. They can come right in and talk. It's all about execution. He knows what he wants to do. I think the inflection point for this administration was the appropriations bill. He did the tax bill. I don't think the appropriations bill was fully explained in details, about what it was. He was very upset when it got approved and a number of conservatives came out and said we can't do this. Structural, trillion dollars of deficits going forward. I think he understood at that time that people may not have been straight with him and explaining to him, and ever since then he cleared it out. He has been directly appointed, and guys are there to execute; they are not there to have a conversation.

MICHELLE CARUSO-CABRERA: Would you ever go back to the White House?

STEVE BANNON: No, not a chance.

MICHELLE CARUSO-CABRERA: Why not?

STEVE BANNON: Hated every second.

MICHELLE CARUSO-CABRERA: Why?

STEVE BANNON: I just -- it's not me. Remember, I was basically year to year. I came in the campaign in the middle of August. Down 16, double digits down. I told him that night, the first night I did it, I said: It's just two numbers. Don't -- forget all the other polling. The only two numbers that matter: 2/3, 1/3. 2/3 of the country still thought we were on the wrong track. They liked President Obama personally a lot, respecting. They didn't think he brought good change. But the most important number, Pat Caddell, who doesn't get enough credit, has been doing polling for years. The first time in American history, I think it was 70 percent of the American people believed the country was in decline.

But the working class and the lower middle class were prepared to follow a leader that returned America to its former glory. And that's the way we ran the campaign for the last 80 days. Make her the representative of corrupt and incompetent elite, and Donald Trump's a tribune of the people. And that's where he won.

MICHELLE CARUSO-CABRERA: What do you think about him doing the walk-back yesterday? He never apologies, but yesterday was as close as he comes.

STEVE BANNON: On two big things that happened I think are 100% correct and towards his policy, because I thought he did a good job in Helsinki, was the border. I didn't like the EO, because I thought that --

MICHELLE CARUSO-CABRERA: The --

STEVE BANNON: The executive. I thought that was a walk-back. It's got to be zero tolerance. He's doing this to stop these children to be destroyed by these cartels that are bringing them up from Central America. He was right on the border, okay? I didn't like that. And I didn't like the walk-back yesterday, and here is why. Donald Trump is strength. His brand is strength. And if you are strong, we're going to galvanize people around you, and you're going to win in November. If you let people around you talk you into being weak and then the next day make up for it, those voices -- the only voice. He didn't need to listen to Steve Bannon. What he needs to listen to is that inner voice. It got him here. Okay? And it's going to keep him here and make him a historical figure, if he just listens to that inner voice.

MICHELLE CARUSO-CABRERA: But you were comfortable with children being separated from their parents?

STEVE BANNON: Here is where I'm comfortable. A zero tolerance policy. If you come through a port of entry and you have asylum, you're going to stay together. If you illegally cross, it's just like a criminal in the United States. You break the law in the United States, the children got to be separated. They have to be separated. I'm sorry. This is to help those people. Remember, the --

MICHELLE CARUSO-CABRERA: How does it help?

STEVE BANNON: The drug cartels today are making more money on trafficking these people than they are in drugs. And all you're doing is destroying them. They don't have a chance for asylum, okay? They don't. And in the broader scope, you're hurting people. All this is doing is hurting people. Being an economic migrant does not get you access to the United States. It just does not. And that's -- we have to take the emotions out of this and look at it rationally. President Trump made a very tough call. No catch and release and zero tolerance. That is what a profile encourages. That is what you hire a president to do, and that's what he did. Donald Trump has made tough decision after tough decision, whether it's in Korea, whether it's with China, whether it's in NATO, whether it's in the Persian Gulf, whether it's in Iran. If you look around the world, you show me one president. The elites in this country, it's very simple, they've been into managed decline, the management and decline of this country. Okay? Both political parties. Doesn't matter if you're Democrat or Republican. They've managed the process to unacceptable outcomes to its citizens. What Donald Trump has said in a very basic and simple way as a businessman: I'm not going to be party to that. I don't care if Democrats or Republicans follow me, but on my watch I'm going to do it in Iran, I'm going to do it in Korea, I'm going to do it in NATO. I'm going to take action on the southern border. Right? Wherever this is. On our tax structure. I'm just not going to kick the can down the road. If you go back and look at Hillary Clinton's speeches, it's all just this elite that want to manage the process of our decline. Donald Trump does not -- will not accept that. And the deplorables, it's the central reason they voted for him and the central reason why they're now a political force in this country and going to be a political force for a long time to come.

MICHELLE CARUSO-CABRERA: Steve Bannon, thank you.

STEVE BANNON: Thank you so much.

MICHELLE CARUSO-CABRERA: Good to have you.

For more information contact:

Jennifer Dauble
CNBC
t: 201.735.4721
m: 201.615.2787
e: jennifer.dauble@nbcuni.com

Emma Martin
CNBC
t: 201.735.4713
m: 551.275.6221
e: emma.martin@nbcuni.com

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