ED Growing US-China conflict

New sanctions on Huawei revive trade war

The United States is starting a new round of its trade war with China amid the COVID-19 pandemic. The U.S. move comes after President Donald Trump threatened to cut off ties with the Asian giant last Thursday. It is feared to pour cold water over global efforts to weather the unprecedented public health crisis and minimize its impact on the economy.

On Friday, the U.S. Commerce Department announced a plan to require global semiconductor makers that use U.S. technology and software in their chip designs to seek U.S. government approval to sell their products to Huawei. The plan is aimed at denying the Chinese firm access to key semiconductor technology.

The new restrictions follow last year's U.S. decision to put Huawei on a black list with the Trump administration describing the Chinese maker of network equipment and smartphones as a “national security threat.” The blacklisting was apparently designed to prevent U.S. firms from using Huawei's 5G wireless network equipment and tighten the noose around the neck of the Chinese IT giant. It has ignited a technology war between the G2 economies, deepening their trade feud.

Despite the decision, Washington seems to believe that Huawei has been taking advantage of a loophole to use U.S. technology. On the other hand, the Chinese government has denounced Washington for strangling Huawei under the name of a national security threat in a bid to protect U.S. tech firms from their rising Chinese competitor.

Now the question is why the Trump administration is trying to launch a new trade and technology war with Beijing and the Chinese firm. The U.S. move defies the common understanding of the international community that the world's two largest economies should cooperate, not fight, to contain the spread of the novel coronavirus and avoid a looming worst recession since the Great Depression of the 1930s.

That's why we have to express worries about the raging U.S. protectionism and unilateralism based on “America first” agenda pushed by President Trump. The threat to server ties with China may be part of his efforts to boost his re-election bid and cover his failure to respond to COVID-19 properly among other blunders.

Washington needs to refrain from initiating a new Cold War. The U.S. had better reach a compromise and a new agreement with China to address their growing trade imbalance and technology issues. No one can emerge as a winner in this new superpower rivalry in both diplomacy and trade. This is not the time for ratcheting up tensions. Instead, it is a time for compromise and collaboration to defeat the coronavirus and save the world from an economic catastrophe.

It is somewhat fortunate that South Korean chip-makers such as Samsung Electronics and SK hynix are not likely to bear the brunt of the deepening U.S.-China feud. Yet no one can categorically rule out the possibility of those companies being caught in the crossfire of the G2 conflict. So Korea and its businesses should work out new strategies to meet the mounting challenges arising from the superpower rivalry.