U.S. Assault on Huawei Undermined

Microsoft's president challenges the US to shut down or shut down Huawei accusations, then Huawei's founder offers to license its 5G technology to US manufacturers. What a difference a week makes.

The US-China trade war continues, driven as much by myopia and misconception as by actual trade issues. President Donald Trump's favorite whipping boy from the trade war is Huawei, and the gap between how Huawei is perceived in China versus how it is perceived in the United States has narrowed in several unexpected revelations this week, all played out in the press, the public opinion rodeo circle.

US companies have accused Huawei of stealing intellectual property (IP) for decades. These accusations seem credible, but the most serious ones appear to be historical. The lawsuit announced by the US Department of Justice in January last year pertains to some Huawei shenanigans back in 201[ads1]2 around a mobile phone test system designed by T-Mobile. Yes, it was wrong, but a seven-year-old incident over a smartphone tester is a thin justification for a trade war that risks ending one of the longest economic expansions in US history.

Some in the high-tech industry are cheering on trade wars to support what they see as Huawi's historic sins, but Trump hardly mentions Huawi's alleged IP theft. Rather, he attacks Huawei based on a belief that Huawei 5G equipment installed at the core of communications networks across the globe could be exploited by the Chinese government for espionage.

Huawei responded to this charge months ago: the company has no intentions of spying, and if the United States believes the Chinese government can use Huawei's equipment to spy, it proves. The Trump administration's lack of response simply confirms to many Chinese their longstanding belief that the United States has never treated China fairly, and does not treat Huawei fairly now.

A week full of development
Chinese points to the US Department of Commerce's 2017 seizure of a large shipment of Huawei telco equipment and the storage of Huawei leader Meng Wanzhou (of Canada, at the request of the United States) in 2018. Huawei filed a lawsuit against the United States for the return of the products; that situation was resolved just days ago when Commerce returned the equipment without explanation and Huawei dropped the lawsuit. Meanwhile, Wanzhou, the daughter of Huawei founder Ren Zhengfei, was prosecuted by the US Department of Justice for financial fraud.

The problem for Trump is that the Huawei challenge ("prove it") is completely reasonable – so much so that the only surprise with Microsoft President and Chief Executive Brad Smith agreeing with Huawei was how long it took for a prominent CEO to the US high-tech industry said it publicly.

In an interview published Sunday, Smith told Bloomberg Businessweek that Trump's ban on selling to Huawei "should not be taken without a sound basis of fact, logic and the rule of law." Smith said the Trump administration's position has been, "& # 39; Well, if you knew what we knew, you would agree with us." And our response is, "Great, show us what you know, so we can decide for ourselves That's how this country works. & # 39; "

  Brad Smith

Brad Smith (source: Microsoft)

Then on Tuesday, New York Times columnist Thomas Friedman wrote that he had met the exclusive Huawei founder Ren Zhengfei, reporting that Ren had made a startling offer: If the US is concerned about potential security issues related to Huawei equipment, Hauwei would be open to licensing its technology to US-based manufacturers.

Easier said than done. companies could not get rid of the operation of the telephone network equipment quickly, and it is doubtful that some US manufacturers want to join that market, but the offer is no small thing, if for no other reason than that forcing Trump to take the next move is his only pull tariff rates for Chinese goods, and not many Chinese goods are unverified. Maybe he can raise some 50 percent tariffs that nobody is going to pay to 75 percent tariffs that nobody's going to pay either.

His methods were unclear
This is Trump's trade war. He has been able to continue with this because the goal of removing trade barriers and improving trade conditions between China and the United States is a necessity and has broad-based support. But the Trump administration is the gang that couldn't tax justice. Trump believes China is paying the tariffs he charges, and his advisers have apparently given up trying to tell him that his tariffs are coming out of the pockets of US citizens.

Furthermore, his specific demands on China seem confused – to Western analysts. If so, imagine how these demands are seen by the Chinese. Some US requirements are not easily achievable for the United States For example, the Trump administration requires China to buy more US products, but US manufacturers of some of these products are already in close proximity or have a production capacity, according to Citigroup analysts quoted by Business Insider.

The list of things that Trump calls for China to buy more is long, but his rhetoric has focused on soybeans and semiconductors. Since launching the trade war more than a year ago, Chinese imports of US agricultural products have halted, and Trump is giving billions of tax dollars to US farmers to temporarily buffer them from reduced demand. If China can find other sources, it is unlikely to resume trade with US manufacturers. India, Russia and other countries are maneuvering to increase agricultural production for export to China. "Temporary" risks becoming "permanent."

China's imports of US computer chips have also fallen, partly because Trump has essentially banned sales to Huawei, not only one of China's largest electronic companies, but among the world's largest. Trendforce said AMD, Broadcom, Nvidia and Qualcomm – four of the largest IC design companies in the world – have declining revenues due to the trade war. Trump is not giving them any money to compensate them for their losses.

Meanwhile, the global stock market trend lines look like roller coaster tracks, twisting sharply up and down with each statement from Beijing or DC That said, the stock exchanges are largely going up. Investors seem to be ignoring the damage the trade war is doing. Or maybe it's just that they don't care.

Remember that the stock market is not the economy. A number of recent economic analyzes observe that the largest engine in the US economy by a very, very large margin is consumer spending. As long as US consumers continue to use this analysis, it is OK for the industry to have a recession – as long as the bad effects are limited to the industry. Unfair commercial practices? Alleged IP theft? Conscious of using the entire semiconductor industry? The markets may not care how any of it is resolved. Worse, they may not care about any of it being resolved.

The industry's response, as such
Perhaps the industry is not so important to the national economy, but on the other hand, this argument by analysts may just be a step to promote consumer confidence – to encourage consumers to spend as long as possible as the industry and ag sectors take a dive. Indicators that the world is heading into a recession are accumulating; pretending that the US-China trade war is no big deal, whistles past the graveyard.

In any case, it must be sobering for American technologists to hear a growing chorus of economic savvy who reject their relevance to the US economy.

The high-tech industry has tried to influence events. All the while, someone in the tech industry has been anonymously informing journalists by the big diaries that the US's most powerful high-tech leaders have been lobbying for the Trump administration. These sources do not say what managers are lobbying for, but they want to reassure investors and the public that the technology industry is actively doing something. They just don't want you to know what it is.

If these directors lobby to continue the trade war, then they clearly have what they want – an ongoing trade war with no end in sight. It is not clear why anyone wants to perpetuate the irresolution and income decline, but since technical leaders refuse to comment publicly, it must be considered as an opportunity. If they lobby privately to end the trade war, they have wasted their time. If high-tech CEOs want this trade war to end, they gambled the company's financial performance on discussions in the back room, and it was entirely predictable that they would lose the loss. Trump and his supporters want nothing more than to win, and with his trade war he tells everyone who can read a tweet that he is winning.

Maybe he is. It seems that the majority of Western thinkers believe that if Trump continues to pressure China's economy, eventually the Chinese will turn on Xi and demand that China capitulate to US demands.

Not going to happen.

The Chinese think Trump is unfair to Huawei and Xi and China as countries, just as (they also think) America has always been unfair to China. Xi may appear to be accommodating to the United States – has appeared to be accommodating – but Trump is continuing the lenient introduction of tariffs, suspending them and imposing them again. The Communist Party does not need to expel propaganda; Trump does all the work for them. At this point, as far as the Chinese are concerned, Xi can become absolutely indispensable, and all of China will blame the United States for all its consequences. It is now not possible for Xi to lose the support of Chinese citizens.

Chinese politicians have the long-held view, and everyone knows that it is possible to wait for Trump, whether he is re-elected or not. Furthermore, China has recently cleared the way for Xi to remain as president as long as he can hold the post. He is, in fact, a secular emperor. He can hold.


General view on topic


US trade deficit with China is too large


Tariffs restore trade balance (because China pays tariffs) [19659036] False

China manipulates its currency

China ceased manipulating its currency in 2014

Trump was elected in 2016

China subsidizes steel, aluminum, other materials production / goodness19659044achteTrue.??1919909045_No the subsidy around Though the world has become steady, all greater economic power still subsidizes at least a few things.

Encourage China to buy more US goods, including agricultural products. [19659035] This could have been achieved without an open trade war.

As the trade war draws on, China buys less from the United States and looks for other suppliers.

Chinese companies conduct IP theft.

Specific direct theft allegations were common. Newer charges exist but are few.

China is developing more of its own IP and has increasingly supported global IP protection.

China forces companies that want to set up operations in China to share IP.

Irritating to Western companies, but generally considered the cost of doing business in China

largely unaddressed by the Trump administration.

Chinese communications equipment represents a security threat

The charges, mainly the level of Huawei, are still not proven.

Other Western governments do not think this is a significant concern.

Chinese surveillance equipment represents a security threat

Monitoring has led to increased security in some cases and political repression in others. In the latter cases, Chinese technology companies are often involved.

Obtained once by Trump Admin and then dropped.

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