Just a week into the cessation of combat in the long-standing trade dispute between the U.S. and China, the latter has leveled accusations at the former for breaching the interim pact they brokered in Geneva. Monday saw China’s Commerce Ministry voicing out, asserting that the U.S. had implemented ‘discriminatory measures’ against it. This came after the U.S. Commerce Department urged American businesses to steer clear of Chinese-manufactured microchips, calling out specifically those from Chinese tech behemoth Huawei.
There’s been mutual retraction of various retaliatory actions by both sides as they entered into a 90-day cooling-off period, an arrangement set forth following meetings in Switzerland. This came on the heels of U.S. President Donald Trump’s imposition of substantial tariffs. A mechanism for consultation was put in place to deliberate upon their extensive trade dissensions, but the bounds of this special conduit might currently be in contention.
The Chinese government, known for its conviction, is strongly pushing back against the ongoing U.S. industrial policy in up-and-coming and pivotal technologies. Consider for instance the advanced computing chips that are driving the competition for domination in the field of Artificial Intelligence. This indicates that the inherent economic security worries plaguing both parties won’t be simply ironed out, despite having commitments scribbled on pieces of paper.
According to an advisory by the U.S. Commerce Department’s Bureau of Industry and Security, high-performance integrated circuits built for advanced computing like Huawei’s formidable Ascend chips, ‘were possibly developed or made in contravention of U.S. export control regulations.’ Responding in general terms last week, a representative of China’s Commerce Ministry alleged that the U.S. ‘exploited its export control measures and enforced more stringent restrictions on Chinese semiconductor products based on unsubstantiated allegations.’
A refreshed declaration posted on its official site this week, expressed the ministry’s assertion that U.S. actions have gravely compromised the understanding arrived at in the high-level dialogues held between China and the U.S. in Geneva. Chinese negotiators employed the distinctive channel to ‘insist that the U.S. rectify its blunders’, the declaration added. The statement also implored both parties to ‘settle respective concerns’ through the application of frameworks like the newly instituted economic and trade discussions.
Huawei is respected as a ‘national pride’ in China, denoting the company’s unique status of being a large-scale entity operating in a sector of strategic importance with potent ties to the government. On previous instances too, it has found itself on the receiving end in the trade conflict between the U.S. and China, particularly during the initial term of President Donald Trump. Despite exertions to exclude Chinese high-tech stakeholders, semiconductor manufacturers such as Huawei persisted in expanding and have achieved progress that took industry observers by surprise.
While friction seems visible on the surface, the U.S. and China continue to hold discussions behind the scenes. Only time will tell how the narrative around the complex U.S.-China technological and trade warfare evolves. The current trade skirmishes reflect the larger struggle for dominance in the global technological space. Meanwhile, global market stakeholders are watching closely as the trade and tech war saga unfolds between the two superpowers, waiting anxiously on the sidelines.
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