Sino-American Trade Tensions Spread As Security Tensions Mount

China is seeking to retaliate to U.S. sanctions, which aim to redefine and restrict the economic activity of Chinese owned companies within the U.S., amongst them Huawei, grounded on fears that the Chinese state may utilize the reach of Chinese enterprise to spy on U.S. technological and military activities. The U.S. has also encouraged other nations to follow suit, including New Zealand, Australia and the United Kingdom. The ban, which came in the form of an Executive Order issued by President Trump in early May, prevents sales in the U.S. and clamps down on purchasing of U.S. manufactured components, vital to the manufacturing of Chinese devices, for example, Huawei.

The Chairman of The Federal Communications Commission, Ajit Pai, warmly welcomed President Trump’s Executive Order, labelling the move as “a significant step towards securing America’s networks.”  Conversely, Huawei’s official Spokesperson was quoted bleakly asserting the Executive Order’s detriment to technological advancement, both in the U.S. and between two economic superpowers, given Huawei’s recent pioneering of innovative 5G technology: “Instead, this (the Executive Order) will only serve to limit the U.S. to inferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deployment, and eventually harming the interests of U.S. companies and consumers.” Granted, both consumer and security concerns must be given weight, with the U.S. Federal Branch espousing security enhancements and Huawei noting the resulting detriment to consumer choice and technological quality, given U.S. sales for Huawei surged 400% between 2009 and 2018. Pertinently however, given the Executive Order’s imposition of license requirements, as opposed to an outright legal ban for sourcing of U.S. components, and U.S. sales, infers increased bureaucratic red-tape meaning perhaps U.S. firms face merely a short-term lag in performance.

Notably, the reach of the Executive Order extends to international markets, essentially meaning Chinese owned companies will find it exceptionally difficult to purchase non-U.S. products which contain any U.S. based component. Consequentially, U.S. state institutions and industry may find themselves in a deeper hole than initially thought. For example, imposition of a deep division between the technology of two superpowers limits co-operation and thus U.S. benefit – as with 5G technology, pioneered by Huawei (in markets including the U.K.), which heralds numerous military applicable benefits, including no network communication lag and inclusion of smell and touch based digital combat training. Obvious detrimental regressions to U.S. military capabilities are reflected by General Joseph Dunford of the Marines, who quotes, “dominating 5G tech will be in the national security interest,” meaning perhaps Chinese domination, as is likely the case, will not be in U.S. security interest.

The Executive Order symbolizes a small scale Red Scare, the historic post-World War Two promotion of Communist fear, paralleling the modern version which espouses exaggerating foreign threats, and when combined with Trump’s threat to increase Chinese tariffs, amounts to appealing to 21st century economic competitiveness. For example, Chinese Intelligence using conventional means, such as LinkedIn, to hire a former CIA officer. Of note, perhaps most to the U.S. security apparatus, is the lack of effectiveness of the Executive Order in slowing down Chinese technological progress; For example, PEACE (Pakistan and East Africa Cable) building securitized and digital connections with the developing world.

Perhaps the best route to ultimately enhancing security capabilities would be to dampen economic considerations and instead seek a comprising middle ground to build a more robust security apparatus, one which, as troublesome for the U.S. as it may seem, includes Chinese enterprise.