• th6028

Sino-US Tensions: One Last Hurrah

Updated: Jan 13, 2021

Source: Reuters

Times moves quickly in Washington. The China-US trade war, which began in 2018 after Trump blamed “unfair [Chinese] trade practices” for the American deficit, feels like a lifetime ago. Since then, rarely a day has passed without Donald Trump making media headlines for one reason or another. Just this week, for example, he used a midday rally to incite an invasion of the US Capitol, with hundreds of his Republican supporters storming the building leaving five dead. And now, just two weeks before Joe Biden’s inauguration as the 46th president of the United States, Trump is making one last attempt to leave his mark in the only way he knows how - sanctions against China.

Applying pressure to China and the Chinese Communist Party was central to Trump’s presidential campaign and he has not failed to deliver. He was a vocal critic of Huawei’s involvement in the rollout of 5G networks in the US, with Huawei subsequently excluded; he imposed tariffs on billions of dollars worth of Chinese goods; and, more recently, he has moved to ban certain Chinese firms from operating in American markets.

Source: Daisy Gemmel

Back in August, Trump signed executive orders banning WeChat and, more controversially, TikTok. He declared TikTok and the data collected on its 80 million active American users a threat to national security, amidst fears that its information could be used by the Chinese government. China’s Ministry of Foreign Affairs dismissed the President’s concerns and suggested that he was promoting his own “selfish interests” at the expense of US citizens. The jury is still out on the orders - quite literally. The orders, halted by judges in California and Pennsylvania respectively after legal challenges, may still take effect, but Mr. Trump is not backing down. On Monday, the shares of China’s three largest state-run telecom groups will be removed from the NYSE as Trump’s executive order prohibiting American investment in companies with ties to the Chinese military comes into force; the order covers thirty-one firms. He issued a further order this week banning eight additional Chinese apps, citing the threat posed by the “pace and pervasiveness” of their expansion and the accompanying data. Jack Ma’s Alipay, which has recently found itself in the crosshairs of Chinese authorities, was among those listed.

What happens next?

Before Biden’s inauguration: probably nothing. Legal challenges will follow the most recent executive order as they did with the ban of TikTok and WeChat back in August, and Biden will have the option to reverse the orders when he does take office. However, all is not rosy in the US. China issued new rules which state that those complying with the new orders would be liable for damages in Chinese courts, and have warned that ‘necessary countermeasures’ will follow the delisting of the Chinese telecom groups. With regards to Biden: the incoming President’s stance on China’s threat remains to be seen, but a difficult journey lies ahead if he wishes to restore relations.