There is a Chinese proverb that translates as: “It is always better to endure short-term pain than to allow the disease to remain untreated.” This aphorism offers great wisdom in the U.S. trade war with China.
The trend of reshoring - or companies moving production back home -- is most prevalent in the capital machinery and electronics sectors in Japan and Taiwan, where companies are moving home to avoid higher U.S. tariffs on imports from China, a Nomura analysis of 56 companies found.
The United States and Poland believe suppliers of 5G network equipment should be rigorously evaluated for foreign government control, a joint declaration signed on Monday said, as Washington pressures allies to exclude China from 5G networks.
Hours after China announced retaliatory tariffs on U.S. goods on Friday, President Donald Trump ordered U.S. companies to “start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” The stakes are high: U.S. companies invested a total of $256 billion in China between 1990 and 2017, compared with $140 billion Chinese companies have invested in the United States, according to estimates by the Rhodium Group research institute.
A common mistake in Washington is thinking about U.S.-China competition through a Cold War mentality that views Beijing as an adversary that we can contain and isolate like the Soviet Union. The United States and China are economically intertwined in a way that America and the Soviet Union never were and that America and Russia are not today. Regardless of presidential tweets saying that "we don't need China" andthatU.S. companies should find alternative markets, decoupling from China in the global economy is simply unrealistic and would be in neither country’s interest.
Huawei is facing a “life or death crisis” amid continued pressure from the U.S. government, its founder and CEO told employees, as he laid out a strategy for the Chinese telecommunications giant going forward. In a memo to employees of Huawei’s networking division seen by CNBC, Ren Zhengfei described the company’s current situation as a “battle.”
...even if there are significant breakthroughs on the trade front -- and that’s a very big “if” -- it will do little to change the anti-China mood in Washington. Partisan rancor and the president’s Twitter musings may get the headlines, but there is broad agreement in the nation’s capital that the Sino-U.S. relationship has fundamentally changed.
Underscoring the complexity of the U.S.-China trade relationship, careful observers will notice that there are more than two sides vying for influence at the table as negotiations continue in search of a possible deal. In fact, when it comes to the most important strategic question at the very heart of the dispute--what to do about China’s mercantilist campaign to dominate global markets for key advanced technologies--there are at least three contending positions on the U.S. side alone.
President Trump directed the Commerce Department in May to place Huawei on its “Entity List,” which is seen as a death sentence for included groups as U.S. companies are banned from doing business with them. A “temporary general license” allowing Huawei to continue doing business in the U.S. had already been granted for one 90-day period.
The United States Trade Representative office said Tuesday that new tariffs on certain consumer items would be delayed until Dec. 15, while other products were being removed from the new China tariff list altogether. It cited health and security factors. The duties had been set to go into effect on Sept. 1, so the announcement eased concerns about the holiday shopping season.