Why Trump's Huawei ban is a failed strategy?

2019-05-22 19:37:29 GMT (Economies.com)
Why Trump's Huawei ban is a failed strategy?

The United States has many economic weapons in its dispute against the Chinese giant, but that does not mean that they should use all of them.


One example is the US strike on Huawei last week, with the US Department of Commerce putting Huawei and nearly 70 of its affiliates on an “Entity List,” meaning that U.S. suppliers may now need a license to do business with them. Both Huawei’s mobile phones and its network equipment rely on US software. If the ban is strictly enforced, it could lead to the collapse of one of China's most famous companies which employ more than 180,000 people.


The United States has long claimed that Huawei poses a threat to national security. There is certainly reason to worry that incorporating Huawei's equipment into America's fifth generation networks will make it vulnerable to espionage. But the United States is already taking intensive steps to prevent Huawei's equipment from being used domestically.


Why putting the Chinese companies out of business is not a good idea for the US?


For one reason, its collateral damage. Companies around the world - that have nothing to do with the trade war - including the American suppliers of Huawei - can lose their business, suffer turmoil and incur huge costs. China will also double its efforts to produce locally developed software, which will directly threaten the dominance of its US counterpart globally.


Some ask, "Perhaps the decisions of the US administration are a negotiating strategy and nothing more?" But even as a negotiating strategy, these decisions are less logical. Why? US officials claim that these decisions have nothing to do with stalled trade talks, but Trump also seems to want to use Huawei as a scapegoat to achieve his negotiating goals with China, just as he did last year with China's ZTE. Trump's decision was also based on espionage problems and national security. Unfortunately, there will be countermeasures that will exacerbate the current impasse, as giving the Chinese giant no incentive to abide by the final agreements isn't a solution to that issue.


What really the United States needs is a bigger plan, a plan that seeks healthy coexistence with China, not alienation or economic isolation. This means working with allies to press China to comply with global standards, taking the lead in writing new rules which can restrict China's aggressive behavior.

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