The Tech War Behind The US-China Trade War

The US-China trade war may have started off as a competition over natural resources, but it has expanded far beyond that.

Now, US and Chinese tech companies have been thrown into the mix, with the spotlight on Huawei, and to a lesser extent, Apple.

Huawei has been left between a rock and a hard place. The Chinese tech and telecom giant has been cut off from their business relations with American companies, which they rely on for a variety of goods and services. The company’s Android devices are in limbo, as they’ve been cut off due to their placement on the “entity list,” which bars them from further business with American suppliers. This has highlighted another part of the trade war that has been pushed front and center: the tech war.

The small cold war going on between the world’s two largest economies has shifted from a pure trade war into a cold war of technology as well. This tech war is serious, as it will likely affect consumers around the world as supply falls behind the worldwide demand for tech products, particularly smartphones.

China, for its part, has long sought to become the world leader in both the economic and technological spheres. The country’s “Made in China 2025” plan has been executed in the hopes of making this goal a reality.

The US, for its part, wants to remain the world’s undisputed leader in tech. Beyond that, concerns over respect for intellectual property rights in China is another factor.

We don’t quite know what will happen next, but we do know that for now, China has taken the brunt of the damage, but certain industries in both economic powerhouses have already taken a serious hit. Politically, neither Trump nor Xi are willing to back down yet, as it would make them look weak to their supporters. For now, tit-for-tat tariffs have been the default option as protectionist policies continue to escalate. When it comes to tech, China has an insulated tech industry, as many companies, such as Google and Facebook, have long been banned in China, a policy that Trump sees as unfair.

The US has effectively accused Huawei of spying on behalf of the Chinese government, and the current administration’s interests surround stopping American tech from being shared with China. There is no clear way out of this quagmire yet, but the most likely outcome is a deal which allows both countries to save face, while coming to a compromise. Short of this, it would seem that the trade and tech wars will continue.

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7 months ago
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