Trump Versus Bannon May Spell Trouble for Republicans

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The wrangling over the future of the party burst into the open with Donald Trump’s denunciation of his former chief strategist Steve Bannon, who the president said “lost his mind” after leaving the White House last summer. 

Now the party’s candidates, donors and leaders are under pressure to choose sides ahead of midterms that threaten their Congressional majorities.

Bannon, the blustery face of far-right populist nationalism, invited Trump’s wrath through published excerpts of an upcoming book critical of the year-old administration. Among the revelations, Bannon called a 2016 meeting between Donald Trump Jr. and a Russian lawyer “treasonous.”

The rupture represents a dangerous distraction for Republicans seeking to focus voters’ attention on their December tax-overhaul victory.

Still, establishment Republicans see a potential upside. They’ve long argued that the promotion of Bannon-backed candidates like Roy Moore — who lost last month’s special Senate election in Alabama — puts the party at a disadvantage.

Following the president’s statement excoriating his old ally, Senate Majority Leader Mitch McConnell’s staff tweeted a video of him sitting silently at his desk, grinning.

Trump Versus Bannon May Spell Trouble for Republicans

Global Headlines

Iran protests wildcard | Anti-government demonstrations in Iran are adding new urgency to Trump’s deliberations over whether to blow up the nuclear deal. The president faces a series of key decisions starting next week — foremost if he should preserve a provision of the 2015 agreement that lifted restrictions on Iran’s banking, oil and shipping industries. Bloomberg’s Washington team looks at his options.

Merkel inches forward | Angela Merkel’s party bloc was upbeat after sounding out the rival Social Democrats on renewing their government alliance, which would end Germany's longest political stalemate since World War II. Both sides said they’re optimistic about preliminary coalition talks starting Sunday. The three-term chancellor isn’t home free by any means: if party leaders agree to begin full-scale talks, an SPD convention on Jan. 21 will have to give its backing first.

Iran-sanctions conspiracy | A senior executive at Turkey’s state-run Halkbank was convicted in New York yesterday of helping Tehran evade U.S. financial sanctions, capping a month-long trial packed with intrigue that President Recep Tayyip Erdogan labeled an “international coup attempt.” The verdict is likely to further strain ties between Turkey and the U.S., while investor attention moves to whether fines or sanctions will be levied against Halkbank and Turkey’s government for their involvement in the scheme. 

Checking Chinese influence | China’s efforts to boost its financial and trade ties with Latin America is meeting pushback from the Trump administration. The Treasury last month raised questions about Beijing’s overtures to the Inter-American Development Bank, a multilateral lender that works to reduce poverty and inequality in Latin America and the Caribbean, in a letter to its president obtained by Bloomberg. It’s the latest sign of an intensifying rivalry between the world’s two largest economies.

A “two-state slogan”? | A leading candidate to succeed Prime Minister Benjamin Netanyahu said world powers should stop trying to create a Palestinian state. Gideon Sa’ar, a former education and interior minister, said in a Bloomberg interview that he’ll run for the ruling Likud party leadership after Netanyahu leaves office. With Trump threatening to cut off U.S. aid unless Palestinians come to the negotiating table, Israel’s right-wing parties are promoting policies that could make talks harder.

And finally... As if the deep freeze that’s sent temperatures plunging to all-time lows across the eastern half of the U.S. weren’t enough, the region now faces a rare snow bomb, Brian K. Sullivan reports. A storm is set to race up the U.S. East Coast today, bringing more snow, ice and winds from Florida to Nova Scotia, including New York. The weather stands to wreak havoc on markets for longer, as electricity prices have surged to the highest level in years and natural gas demand hit a record high.

Trump Versus Bannon May Spell Trouble for Republicans

 

To contact the author of this story: Michael Winfrey in Prague at mwinfrey@bloomberg.net.

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