What Huawei case says about America's growing impatience with China

As President Trump negotiated a trade truce with Chinese President Xi Jinping in Buenos Aires last weekend, ...

Posted: Dec 10, 2018 1:04 PM
Updated: Dec 10, 2018 1:04 PM

As President Trump negotiated a trade truce with Chinese President Xi Jinping in Buenos Aires last weekend, an arrest 7,000 miles away created another complication between the world's largest economies. Meng Wanzhou, the CFO of Chinese telecom giant Huawei and the daughter of its founder, was arrested in Vancouver on December 1 on suspicion of violating US sanctions on Iran.

Meng's arrest won't keep the US and China from beginning negotiations, likely next week in Washington. Both sides have much to gain from reopening talks. Trump is under pressure from jittery equity markets and Chinese tariffs on US agricultural products, and Xi is eager to get relief from US tariffs that contribute to a slowing Chinese economy.

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But the arrest highlights the fact that fundamental conflicts between the US and China are getting worse, not better, even as the sides try for a détente on trade. Beijing and Washington face technological and geopolitical fissures that may defy efforts to keep them separate from the trade talks.

Meng's arrest is just the most provocative step in the US government's long-running effort to push back against Huawei, which US intelligence sees as a security threat. US policymakers have long pressured American carriers not to use Huawei equipment in their networks, and have taken that campaign global, encouraging allies in Europe and Asia to limit Huawei's presence in existing and shut the company out of their developing 5G networks.

The US' efforts to limit Huawei's global business are just part of the broader conflict over tech between the two countries. Both want to control the next-generation technologies — including 5G, self-driving cars, artificial intelligence and others — that will drive economic growth and national security in coming decades. The US has already imposed new export controls and investment rules that will make it harder for China to acquire US technology, an effort that will continue regardless of the outcome of trade talks. Forget the Mexico border wall. The real walls are the virtual and legal ones being built around Silicon Valley and other US tech hubs.

Washington is putting China in a strategically dicey double-bind on tech issues. The experience of ZTE — a Chinese national champion nearly put out of business last summer for violating US sanctions — has made self-sufficiency in tech even more important for China. But the subsidies for key sectors that would make self-sufficiency possible are also a key target of the Trump administration, which believes Chinese subsidies will eventually create the kind of overcapacity that has crippled the steel and solar panel sectors in the US. Xi and senior Chinese officials now realize this, and the Meng arrest and broader salvos against Huawei have been a painful reminder that the ZTE case was not a one-off.

Geopolitical competition is making it all worse. The willingness to take unprecedented actions — like extraditing Meng — reflects a profound attitude shift on the part of the United States, and is one that reaches across both political parties. The US has lost patience with engagement and quiet diplomacy with China, which it now sees as a formidable rival intent on challenging US dominance. The Trump administration is likely to take additional actions in coming weeks and months that look to push back on Chinese policies in areas ranging from cyber espionage to territorial claims in the South China Sea. These actions will rankle nationalists in Beijing, and cement the increasing consensus in Chinese policy circles that the US is seeking to contain China.

Even if trade talks can be compartmentalized from these issues, the US and China remain far apart on key questions. Trump has publicly touted major concessions from China on agricultural purchases and auto tariffs, despite little public commitment from Beijing. And the core issues raised by the US in March — intellectual property theft, subsidies for key sectors, forced technology transfers — are far from resolution. US Trade Representative Robert Lighthizer, who will lead the talks from the US side, will want concessions from Beijing on those issues that will be politically and economically difficult for Xi.

Meng's arrest won't cripple the talks on its own, but it makes an already difficult process much harder.

Mississippi Coronavirus Cases

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Cases: 343505

Reported Deaths: 7543
CountyCasesDeaths
Hinds23932444
DeSoto23229283
Harrison20527329
Rankin15411291
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Madison10959227
Lee10719179
Jones9047169
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Lincoln4176116
Pike3667113
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Tate353388
Alcorn350974
Sunflower347694
Scott341176
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Simpson322891
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Holmes200174
Clay197654
Clarke186880
Tallahatchie183742
Calhoun181332
Smith179235
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Walthall145748
Lawrence142826
Greene140134
Amite137543
Noxubee135235
Perry133538
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Carroll126431
Webster121232
Jefferson Davis116734
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Humphreys100133
Franklin87923
Quitman84719
Choctaw82619
Wilkinson78032
Jefferson71328
Sharkey51618
Issaquena1736
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Alabama Coronavirus Cases

Cases: 587405

Reported Deaths: 11536
CountyCasesDeaths
Jefferson853851591
Mobile48932864
Madison37517533
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Tuscaloosa27171465
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Baldwin25399329
Lee17224181
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Cullman10546205
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Walker7793288
Autauga7563114
Jackson7400117
Blount7362139
Colbert6703142
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Dale5650117
Russell480243
Chilton4771117
Covington4749125
Franklin458181
Tallapoosa4519156
Escambia441383
Chambers3949125
Dallas3743163
Clarke371263
Marion3463107
Pike332579
Lawrence3263100
Winston298773
Bibb290465
Geneva283983
Marengo262467
Barbour250961
Pickens245562
Butler240872
Hale235578
Fayette227065
Henry213945
Monroe202141
Randolph201144
Cherokee199248
Washington185239
Macon170552
Crenshaw168358
Clay166259
Cleburne161345
Lamar151038
Lowndes145455
Wilcox132331
Bullock126542
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Coosa118329
Perry110528
Sumter110333
Greene99137
Choctaw64425
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