The UAE News analysis: Hopes for the end of the trade war between the US and China now rest with the administration of President Joe Biden, following an intense conflict fueled by the Trump administration against Chinese exports and the ban of several companies to work on US soil, including its cyberspace. However, the strict stance on China’s expansion was not initiated by Trump alone.
Over the past 3-4 years in particular, the US stance has embraced direct confrontation with China. This was pursued by the Trump administration and there does not seem to be a step change in the near future. One thing that everyone seems to agree on—Republicans and Democrats—is to adopt a tough approach with China and to limit its influence globally. This is what the country is also trying to convince its allies to do.
The latest confrontation has been focused on technology, and it’s unlikely to stop any time soon due to its impact on future economies. The US government has taken measures to prevent US data from being stored on cloud systems owned by Chinese companies, as well as the use of submarine cables to connect the US to the global Internet. Former President Trump had conflicted with China over telecom networks from Huawei and apps like TikTok, WeChat, and other technologies from Chinese companies. This is regardless of whether they were private companies or owned by the Chinese government.
Today, the tech trade conflict is indicative of a bigger plan which includes influencing the world’s future economy. The US stance against companies based on “national security” allegations has actually been more focused on restricting Chinese technology leadership and global dominance; something which has enormous economic consequences for the West.
In the case of Huawei, Former US Secretary of State Michael Pompeo went so far as to say that Europe needs to get Huawei “out of their system” as part of ensuring “that the next century remains a Western one”. Former US Attorney General William Barr was quoted as saying that some private American businesses are actually the problem for not doing enough to maintain American strength. Barr has gone on to say that the US has been the technological leader of the world, but that the Western world now has to pick a Huawei competitor to invest in so as to claw back a technological dominance.
Many experts believe that the Trump administration’s policy of banning Chinese technology has negatively affected American companies, given that Chinese companies are among the largest customers of the US. This is the case for Huawei with Intel, which reportedly disrupted deals worth more than $11 billion to buy chips during the first year of Huawei being blacklisted.
The Financial Times also recently reported how a number of European technology executives and diplomats accused the US of using the sanctions against Chinese tech companies to keep them away from China’s market, while at the same time, the US administration was granting exemptions to US companies to deal with Chinese brands[1].
The “national security” debate has also brought greater scrutiny on the US government itself. One particularly damaging investigation is in the Snowden leaks and reported by The Washington Post as to how the CIA has used the company Crypto AG to spy on other countries for decades[2].
While the debate over trade and technological leadership continues, the biggest loser today is the global economy. Significant parts of international trade are being undermined. There are greater doubts on the future of global ICT supply chains. Joint innovation that benefits all humanity is being curtailed. To that end, the American business community would do well to confront US politicians about their short-term thinking. Whether they like it or not, China is adopting a long-term strategy in technology and innovation. Only cooperation—not exclusion—will see the digital economy flourish to its full potential.
[1] https://www.ft.com/content/7baa8caf-ca3f-4d95-967c-e315a3ee348f
[2] https://www.washingtonpost.com/national-security/swiss-report-reveals-new-details-on-cia-spying-operation/2020/11/10/c93ca7fc-2386-11eb-8672-c281c7a2c96e_story.html
