The tension in trade relations between the United States and China was one of the aspects that certainly marked the four years of Donald Trump’s administration. In the year that Joe Biden was elected as the new president, the outgoing Administration war on Chinese technology, seen as a threat to national security, remained on fire with the growing “black list” and entry into new battlegrounds.
It is true that 2020 even started on a slightly more positive note with the signing of the first phase of a “truce” agreement on January 15 that included greater protection of the intellectual property of American companies. However, outside the negotiating table were customs duties, as well as the trade block imposed on Huawei and other Chinese technology companies that were prevented from doing business with the United States, something that ended up setting the tone that echoed throughout the year.
USA vs. Huawei: a saga that (still) runs a lot of ink
In February, geopolitical tension between the United States and China escalated again with the government moving forward with a new list of charges against Huawei, which included extortion and conspiracy to steal confidential information.
The manufacturer has been accused of violating the Racketeer Influenced and Corrupt Organizations Act (RICO) and of stealing trade secrets from six US companies, including T-Mobile. The United States Department of Justice also claimed that Huawei has commercial ties to North Korea and that the manufacturer has provided internal surveillance systems to the Iranian government.
In response, Huawei argued that the United States intended to block its expansion as a threat to US commercial interests. The company claims that this new lawsuit is nothing more than the merging of several civil charges that have never been proven and guarantees that the US will not prevail with these charges that it considers unfair and unfounded.
Months later, and after the US government prepared measures to prevent China from using its technology and even entered into talks with manufacturers like Intel and TSMC about building semiconductor factories on American soil to reduce dependence of the country in Asian factories, in May a new set of restrictions came to Huawei and the companies on the “black list”.
The measures established that, as of September 15, Huawei’s global suppliers using US technology in the development or production of its products would have to apply for authorization from Washington to sell essential components to the Chinese company.
The situation was complicated for Huawei, which had considered the restrictions to be “arbitrary and harmful”, and after several successive extensions of the authorizations for US companies to continue to negotiate with the company in August, the Trump administration did not renew the commitment, and the effects were felt in the access to fundamental components, like chips and screens.
In addition to the restrictions on doing business with US companies, Huawei was officially considered by the Federal Communications Commission (FCC) to be a threat to national security after the US Senate made its position on the presence clear. manufacturer’s equipment on telecommunication networks in the country through the Secure and Trusted Telecommunications Networks Act.
The decision, which also targeted fellow countryman ZTE, implies that any American telecommunications company will not be able to use the $ 8.3 billion Universal Service Fund (USF) to buy equipment from the companies in question.
All restrictions imposed by the US government reflected a slowdown in Huawei’s growth and, after several rumors, the Chinese group confirmed in November that it was actually going to sell Honor, its lower-end mobile phone brand, in an effort to save the business from the sanctions and blockages imposed by the United States since 2019.
From the growth of the “black list” to the “soap opera” of TikTok
The famous “black list” of Chinese organizations barred from doing business with the United States has clearly grown throughout 2020, starting as early as May, with the addition of 33 Chinese companies accused of being “complicit in human rights abuses and abuses. “in China or have national security or US foreign policy interests”.
Throughout the year, they also counted O-Film, one of Apple’s leading suppliers of tactile modules for screens and photographic lenses, and, more recently, Semiconductor Manufacturing International Corporation (SMIC), the largest Chinese semiconductor manufacturer, and to DJI.
In addition to the US Department of Commerce’s list, what was compiled by the Department of Defense of organizations that have links to the Chinese army, as well as a recent “black list” presented by the government in December and which also includes Russian entities .
With their eyes set on a “cleansing” of the Internet in terms of Chinese apps and telecommunications services in the country, the performance of the Donald Trump government in 2020 was also marked by the saga with the popular application TikTok, which was already in its “sights” since the purchase of Musical.ly by ByteDance in 2017.
The intentions of the US government, which also pointed out batteries to WeChat, would be to ban the application in the United States, effectively eliminating it from Google and Apple digital stores in the territory, on September 15, if it were not purchased by a company North-American.
Amid the resignation of the CEO of TikTok, an authentic business “marathon” and several lawsuits, an agreement between Oracle and Walmart for the purchase of TikTok was finally closed, with the “blessing” of Donald Trump, one day from end the deadline, “escaping” the ban, a fate similar to that of WeChat.
However, despite the “blessing”, Donald Trump revealed that he could back down his decision and not approve the deal if ByteDance continues to hold 80% of TikTok Global. ByteDance had already indicated that China would have to approve the sale agreement, a decision that is not viewed with “good eyes” by the government of the country, having submitted an application for authorization to the Chinese Ministry of Commerce to export the technology used in the application to the United States.
In November, a US court “froze” the executive order of the Donald Trump government that established a ban on TikTok from the 12th of that month, postponing the decision to further legal developments. The negotiation process remains troubled and, in December, the US government chose not to grant ByteDance the extension of an order that required the Chinese company to sell TikTok assets in the United States.
The Donald Trump government remains convinced that the application is being used by Beijing to access users’ personal data and wants to prevent its use in the United States, having recently appealed a court decision preventing the Commerce Department from imposing restrictions to TikTok, which would lead to their ban in the country.
Does the “trade war” end with Joe Biden?
With the inauguration of President-elect Joe Biden, scheduled for January next year, there are many doubts regarding the strategy that his government will take in relation to the complicated “inheritance” left by Donald Trump, in terms of trade relations with the China.
On the one hand, Beijing has already made it known that it outlined a new five-year plan (2021-2025) that establishes innovation and technological self-sufficiency as pillars of the country’s development in the face of the commercial and technological war with the United States.
Across the Atlantic, Joe Biden revealed in a recent interview to The New York Times which intends to reformulate the relationship between the two countries, however, the removal of the tariffs implemented by its predecessor will not be an immediate process.
Among his plans is a complete review of the first phase of the trade “truce” agreement signed in January, seeking to develop first a concerted strategy with American allies in Europe and Asia.
Although the president-elect hopes to reach a consensus with Beijing, the task is complex and will first involve bringing together the interests of the Democratic and Republican parties around the strengthening of American industry. “I will not enter into any new agreements with anyone until we have made serious investments in our country and in our workers”, stressed Joe Biden.