E US Government Escalates Trade Hostility

The United States government initiated at least two escalations against Chinese communications company Huaweii. These escalations are troubling. 

One escalation is the imposition criminal charges against Huaweii for intellectual property theft. The problem with this process is that it is not the way we do business in the United States when an American company disputes property theft against another US company. Almost all litigation is civil, not criminal. The penalty is generally a monetary payment to the offended party. That is the method that should be used against Huaweii. If the government even has a case, it should be a civil case if the United States is interested in expanding business into China in the future.

A second escalation is the hard line both political parties took with Europe. This escalation could seriously offend the Chinese, because Europe agreed with the US point of view, while preferring dialogue instead of confrontation. 

Just as China is Rope-a-doping the US because of the onslaught of American hostility, so too is Europe Rope-a-doping the US, trying to stay on the good side of America while not wanting to go hard line with China as the US (both parties) has pushed for. China and Europe are hoping that the US punches itself out, as George Foreman did while fighting Ali in the Rumble in the Jungle.

US Hostility Toward China

Nancy Pelosi is in the news saying that Huaweii is from an authoritarian nation, therefore do not do business with them. Does she want to sound like Steve Bannon? Apparently so. This position is absurd beyond normal human comprehension. How about the Blue States stop doing business with the Red States or vice versa? Red States are racist. Blue States are Socialist. How do we manage to get along? 

 China has 1.4 billion people to feed and has a proven record of capitalist success. The World Bank has said 700 billion people have been brought out of poverty in China since the 80's. What does Pelosi want, mass Chinese starvation? Does she want a world recession? And Trump seeks to limit China by stopping delivery of GE jet engines to China. That policy has not been decided as of this writing.

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Disclosure: I have no financial interest in any companies or industries mentioned. I am not an investment counselor nor am I an attorney so my views are not to be considered investment ...

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Gary Anderson 8 months ago Author's comment

Update: Trump has just gone on record zaying he opposes his own government's attempt to ban GE engines from China. He has opened a Pandora's box for political gain with a tariff war and now government is running way ahead of him in its hostity toward China!

Don T. Sloan 8 months ago Member's comment

The issue with Huaweii isn't just about patent infringement, it's about national security concerns. That's why it's being handled the way it is.

Rebecca Duncan 8 months ago Member's comment

True, there is a difference between this case and other patent infringement cases. That being said the case against Huaweii is fuzzy at best.

Gary Anderson 8 months ago Author's comment

The US government refuses to show proof of security dangers.

Don T. Sloan 8 months ago Member's comment

Yes, because it is a national security issue. Unless you think America is making up the whole thing. But do you really trust the Chinese government more than the US government?

Gary Anderson 8 months ago Author's comment

In this case, yes. Show proof. Our government has had plenty of time. Read my article on Meng and the rule of law.

Norman Mogil 8 months ago Contributor's comment

Gary, I agree. The issue is that there is no American telecom that is at the forefront of the 5G technology. The US dropped the ball awhile ago and assumed that 5G was a longer way off in the future. Meanwhile, Chinese and European developers marched ahead.( I am biased. I have a Huawai phone and find it better and much cheaper than iPhones. Do I think the Chinese are spying on me??)

Duanne Johnson 8 months ago Member's comment

Yes, they are probably spying on you. But so is Google, Facebook and all the US tech companies.

Gary Anderson 8 months ago Author's comment

Xylinx and VMWare are just two tech companies laying off workers because of the Huaweii ban. That ban is escalating as I point out in the article.

Norman Mogil 8 months ago Contributor's comment

Gary you are correct.Israel's tech sector is deeply involved with China,especially in AI.

As for Flat Broke the US has a long history of not acting in its best intersts. By starting a trade war which the US does not know how to end is a perfect example of not acting and your own best interest.

Flat Broke 8 months ago Member's comment

Obviously that's a matter of opinion. Trump obviously believes the trade war was in the US's best interests, even if you don't.

Gary Anderson 8 months ago Author's comment

You are correct Flat. But Trump also said a trade war with China would be easy to win. He was obviously wrong, and it shows his ignorance about damage tariff wars can inflict.

Texan Hunter 8 months ago Member's comment

How was #Trump wrong about the #tradewar? Our economy is booming while China's is now a mess and half the country is locked down.

Gary Anderson 8 months ago Author's comment

Ask Apple and the other 900 US companies doing business in China. Ask GE about Trump's trade war. We are only booming in the service sector. Biz investment and capacity utilization are cratering.

Derek Snyder 8 months ago Member's comment

I think that has more to do with the coronavirus than the tradewar.

Flat Broke 8 months ago Member's comment

Like any country, America will always do what it believes is in it's best interests. What evidence is there that China was planning to voluntarily purchase more. And what do you mean "even Israel says..." What makes Israel the expert on China?

Gary Anderson 8 months ago Author's comment

Apparently the entire world spans the USA is an expert on China, generally trusting the reliability of the nation in business. Israel is allowing China to operate a port and has found US concerns to be amuzing.

Gary Anderson 8 months ago Author's comment

So, Flat, here is the link. View the chart. China was turning on to American products and tourism to the USA. But then Trump ruined the trust because he is ignorant of China's dismay regarding opening up China by the West. talkmarkets.com/.../tariff-man-trump-fooled-wall-street-from-the-start

Flat Broke 8 months ago Member's comment

Thanks for sharing.

Gary Anderson 8 months ago Author's comment

The Fred chart in a previous article showed an increase in US exports to China until Trump launched his trade war.