22:39 GMT07 August 2020
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    US President Donald Trump, in an interview with Fox News, said that China will not become the world’s top superpower under his watch. Does this mean that the trade war will last as long as Trump is in power?

    According to US president, the trade war plays into the hands of the United States, as the country receives billions in customs duties. In his answer to a Fox News question, the president also said he believes that China wants to replace the US as the world’s leading superpower.

    US President Donald Trump has signed a decree introducing a state of emergency to protect US information and communications infrastructure from foreign threats. In turn, the US Department of Commerce put Huawei on a blacklist for alleged activities contrary to US national security. American manufacturers who sell Huawei any equipment will now need a special license from the US authorities.

    READ MORE: Chinese Newspaper Slams US 'Tech Transfer' Claims Amid Trade War

    Shortly thereafter, a number of Huawei’s largest suppliers, including Intel, Qualcomm, Xilinx, and Broadcom, announced that they were stopping the supply of software and critical components to the Chinese company. Google, in turn, said that it was suspending business contacts with Huawei. This means that the Chinese company will lose access to Google’s technology and software, including Gmail, Google play, etc. Later, Google clarified that the ban does not apply to smartphones and other Google electronics already sold. However, updates to Android software and other Google services will not be available on new products.

    While this is obviously Trump trying to eliminate a strong competitor to US technology companies, such aggressive steps will backfire, first of all, on American partners of Huawei. The Chinese company last year bought foreign components worth $70 billion from 13,000 suppliers, of which American partners supplied products worth $11 billion.

    Thus, to fulfil campaign promises in such a way — to “Make America Great Again” — Trump might fail. After all, a trade war can turn into an economic shock for all market participants, Yang Mian, a professor at the Institute of International Relations of China University of Communications, told Sputnik.

    “Trump has launched the so-called trade war in order to achieve a trade balance. This was one of his campaign promises. Therefore, from his point of view, in order to stay for a second term, he needs to fulfil these promises. On the other hand, representatives of the right-wing in the ruling circles of the United States want to take advantage of this to contain China’s rise. But by no means, everything depends on their personal desires”.

    Commenting on the possible outcome of the trade escalation, Professor Yang Mian pointed out.

    READ MORE: Trade War: US to Pay Heavy Price for Underestimating China – Chinese Businessman

    “We have said many times that there can be no winners in a trade war. And if, as a result of a trade war, the American economy will be exposed to serious shocks, the US-China trade standoff will end”.

    “Regarding Trump’s statement on Fox News that China will not become a superpower with him in office, we can say the following: Trump can stay in power for a maximum of eight years. However, no one can contain China’s rise. Whatever tricks the US takes, whatever measures they take, they will not be able to hinder the rise of China and the prosperity of the Chinese nation, although, of course, certain obstacles to progress are possible”, the Chinese expert added.

    Nevertheless, the professor excludes the possibility of any serious deterrence to China’s rise, as the main reasons for that lie within US domestic politics.

    “However, the task of holding back the development of China is impossible. Whether Trump can stay for a second term depends on how satisfied the American people are with his policies. This is one of the most important factors, but, at the same time, not the only one. If a trade war creates problems in the American economy, it will be an unfavourable factor for Trump and an impediment to the fulfilment of his campaign promises”.

    Trump's capabilities are limited not only in restraining the development of China as a whole, but even in counteracting a single Chinese company. Not only do American businesses suffer – the stocks of almost all Huawei suppliers went down in price — but ordinary citizens are also suffering.

    Thus, in the sparsely populated states of the US, such as Wyoming and Oregon, for example, the entire telecommunications infrastructure is operating on Huawei equipment. In the event of a dramatic cessation of the supply of components for Huawei, there is a threat that the company will not be able to serve these networks and, as a result, Americans will be left without communications.

    READ MORE: Airbus Row: How 'Tariff Man' Trump and EU May Kick Off New Trade War

    Apparently, under public pressure, the US Department of Commerce decided to back off. According to Reuters, the department is ready to provide a 90-day license to companies for the supply of Huawei components. True, the license does not apply to supplies intended for new business projects involving the Chinese company and the production of new products. This measure, according to US authorities, should help American telecommunications companies smoothly switch to equipment from other manufacturers.

    But even a complete ban on the supply of components is unlikely to threaten the stable operation of Huawei. Firstly, Huawei, anticipating the possibility of such an escalation, overstocked its warehouses a year in advance. Therefore, the company can operate without any loss for at least a year, even if all deliveries were to cease right now.

    Secondly, a division of HiSilicon has been developing its own chips for several years, which may not be as technologically advanced as the US ones, but in principle, they can become substitutes under force majeure conditions. Finally, the company has been developing its own operating system for both desktop computers and mobile devices since 2012, so even in the event of a ban on Android, the company's smartphones will work.

    The only thing that US measures can affect is the company's sales in international markets. Indeed, global users will find it difficult to give up using Google services and switch to Chinese analogues. But then again, there is a lot of competition here for Chinese developers. If their software solutions turn out to be better, they can conquer global markets. But even if this does not happen, the capacity of the Chinese domestic market will not allow any company to die.

    Views and opinions expressed in this article are those of Yang Mian and do not necessarily reflect those of Sputnik.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.


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    barriers, market, technology, US-China trade war, Huawei, Donald Trump, China, United States
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