It's the drop of water that makes the vase overflow. As the U.S. tightens restrictions on Huawei, Chinese authorities are raising their voice. If Donald Trump maintains his position, China is also preparing to blacklist several American companies, including Apple.
The trade war between the United States and China is intensifying. So far rather accommodative, Chinese authorities seem to be annoyed with the new measures taken against Huawei by the United States government.
Donald Trump extended restrictions on the automaker until May 2021 last week, saying he still poses a threat to national security. Not content with preventing Huawei from accessing Google services (with the consequences that we know), the American president announced new measures aimed at prohibiting him from accessing the foundries of TSMC which produces Kirin chips on his smartphones. Too much maneuver? Without a doubt.
China promises retaliation
This Sunday, May 17, the Chinese Ministry of Foreign Affairs cracked a press release promising a response from China in the event that Donald Trump maintains his restrictions. Faced with this "Unreasonable repression", The Chinese government "Will firmly defend the legitimate rights and interests of Chinese enterprises" the authorities promise, adding that "US measures destroy global manufacturing, supply and value chains".
According to the Global Times, a media close to the government, China is preparing reprisals. Like the United States, it could blacklist multiple US tech companies unreliable companies, with the accompanying restrictions. Also according to Global Times, Cisco, Apple, Qualcomm and even Boeing could appear on this list of undesirable.
What future for tech?
These tensions between the United States and China could completely upset the tech world. According to the Global Times, China is preparing for the scenario of a “Complete decoupling with the US high-tech sector”. Clear, the sector would be divided into two poles : American products on the one hand, and Chinese on the other.
Problem: this transformation could take several years, the time for each pole to adapt to a new economy. And the United States could be the big losers in this trade war. On the one hand because Chinese companies do not need the United States to grow. Huawei – which has already started its transformation by replacing Google services with its own – has demonstrated this by posting encouraging results despite the US decree.
On the other hand, if China takes restrictive measures, the consequences for American companies could be more worrying. First, they would lose a market of over a billion consumers. Add to this that most production plants are located in China and that the country has the majority of the rare earth mines necessary for the manufacture of all technological products.
The US government has yet to respond to threats from the Chinese authorities. Donald Trump’s next statements should be critical to the future of tech companies.