Unilateral action is counterproductive
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The United States government’s recent moves to restrict access by Chinese telecoms giant Huawei to US technology is the latest escalation in what began as a trade dispute, but now seems to be morphing into a strategic battle in high-technology industries. Apart from import tariffs, Washington has also imposed export controls, restrictions on scientific exchanges and even tighter visa regulations for Chinese students and researchers. With trade negotiations in a stalemate, punitive US tariffs on Chinese products remain in place and could be extended to more categories of Chinese goods. For its part, China shows no signs of capitulating to US demands, and while its response so far has been restrained, it could retaliate.

These developments threaten to impact companies in not only the US and China but also in other countries, particularly in Asia, which are heavily exposed to US-China trade via supply chains in multiple industries. Goldman Sachs estimates that the restrictions on Huawei alone could affect at least 70 companies that supply components or software to the Chinese telecoms giant – many of them American. Some analysts suggest that the intensifying trade and technological dispute represents an attempt by Washington to “de-couple” the US economy from China’s, effectively fracturing global trade into blocs or “spheres of influence”. This is unlikely to work.

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