• Ok, So It's a Trade War, Then?



    This Canadian won't pretend for a moment to be an expert on U.S. politics, yet I feel obliged to report on the latest bizarre twist in the story of the growing American ban on Chinese smartphones.

    A quick refresher: This past January, AT&T abruptly pulled out of an agreement to be the exclusive American carrier for the Huawei Mate 10 Pro; Verizon also announced that it would no longer carry Huawei products. In February, the heads of six U.S. intelligence agencies expressed "deep concerns" about Chinese-made telecom products to the Senate. In March, Best Buy halted all sales and any future orders of Huawei hardware. In April, the Department of Commerce banned U.S. companies from exporting components to ZTE for seven years. As a result, ZTE ceased its main business operations earlier this month.

    And then yesterday, President Trump suddenly and unexpectedly tweeted that he was working President Xi Jinping of China to get ZTE "back in business". But why?

    I believe the answer lies within the nature of the ZTE ban. First there are the specifics: the ban was initiated because ZTE failed to punish employees who violated trade controls against other nations. Second are the political stakes: The New York Times reports that China is acting as an intermediary in talks between North Korea and the USA. Reversing policy on ZTE might help secure China's continued involvement.

    But here's what's most telling to me: According to Reuters, ZTE paid over $2 billion to U.S. exporters last year, including $100 million each to Qualcomm, Broadcom, Intel and Texas Instruments. So banning ZTE would adversely affect not only Chinese jobs, but jobs in the USA as well. Huawei, on the other hand, has its own Kirin chipsets, and is therefore far less reliant on Qualcomm, at least.

    Which makes me wonder whether this whole China scare is less about security and more about trade. What do you think?

    Sources: New York Times, President Trump on Twitter, Reuters

    ---------
    This article was originally published in forum thread: Ok, So It's a Trade War, Then? started by acurrie View original post