Why Americans have crossed a red line with Huawei – the boycott begins, the trade war will escalate

With the banishment of Huawei the Trump administration has crossed a red line – and that means: as long as Huawei is on the black list Beijing will not negotiate with Washington and the trade war will tend to escalate further!

So far the Americans have no evidence against Huawei

Huawei is China’s spearhead of technology: leading in 5G, one of the world’s leading smartphone providers and last but not least Huawei is laying submarine cables to ensure that there is competition with the Internet which is dominated by the USA. So far the US has not been able to provide any evidence to support the suspicion that Huawei is “spying on” data – but probably the Americans simply assume that Huawei is doing the same as the Americans themselves!

Now Google has announced that it will more or less discontinue its business relations with Huawei: this applies to Android updates, components, but also to Gmail and above all the Google Play Store. This makes a Huawei smartphone less attractive for many Europeans. According to the latest news the German company Infineon has now stopped supplying chips to Huawei (the Infineon share loses as a result) – many other Western chip manufacturers will follow!

The battle for technological dominance – now it’s getting serious

With Huawei the USA is in fact attacking the greatest threat to its technological dominance – and in doing so is trying to prevent China from overtaking the USA in terms of technology. But China says: we will pass you by anyway – as the “Global Times” puts it:

„The global economic center will inevitably move to Asia. China has been growing and has an enormous market with great potential. If the Chinese market excludes the US, it would cost the US more than their tariff revenues.“

Now China says: we fight basically for all countries against the aggression of the USA see the following video:

http://www.globaltimes.cn/content/1150663.shtml

Although the US Secretary of State Pompeo (who had previously been criticised in the Chinese media in an unprecedented way!) and China’s Secretary of State Wang Ji have phoned on the weekend. But there will no longer be a trade deal in the foreseeable future – especially when the cascade of consequences that the Huawei ban will bring with it becomes visible.

Now it does not happen what the markets (several times!) priced in as a fact for a longer time – and as long as Huawei remains banned the markets run too far ahead of reality.

China now expects a step from the USA – namely the withdrawal of the Huawei ban as a precondition for the resumption of talks. But that is precisely what Trump cannot do without losing face in domestic politics because the US Democrats are also demanding a tough stance against China and Huawei. A solution to the conflict is therefore no longer in sight in the foreseeable future.


By Petar Milošević – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=31921969

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