The US-China Trade War – Reactions to & The Implications of the Trade War

by Abdul Hussain

Trade wars and economic warfare – those are the things that almost literally nobody likes, especially when everyone gets caught in the proverbial crossfire through no fault of their own, and since Donald John Trump has signed an executive order to effectively ban American companies from trading with Huawei, alongside increasing tariffs from 10% to 25%, businesses from around the world, and the US, are facing increased operating costs because of the tariffs, thus leading to consumers being at risk of paying more for products, and China implementing retaliatory tariffs against the USA while reducing tariffs for other countries.

This eco-political debacle has led to US courier/delivery firm FedEx planning to take legal action against the US Government over item export issues, especially when shipping blacklisted products within the rules imposed as part of the Sino-American (US-China) Trade War, and has made “the MSN of the gaming scene (Microsoft, Sony, and Nintendo)” sign off a joint letter to the US Government presenting the concerns they have with the trade war and its implications, arguing that the tariffs would severely handicap innovation, sales, jobs within the gaming industry, and consumers, especially when over 96% of its gaming systems that enter into US shores in 2018 are made in China. Other companies within the technological sector have also provided their thoughts on the situation, echoing similar concerns to the ones mentioned by Microsoft, Sony, and Nintendo, while some companies are moving production away from China, such as Apple’s supplier, Pegatron Corporation and UK-based power cable manufacturer Volex, alongside Google and Nintendo, while Foxconn (Hon Hai)’s founder, Terry Gou urges Apple to move its iPhone production from China to Taiwan – the same Terry Gou that has stepped down with reports that he will enter into the Taiwanese presidential race while there are concerns with that due to reported ties with him and mainland China.

However, while most companies have expressed concerns, and have moved production to other countries to minimize the effects of the Sino-American trade war, the New York Times has reported that certain US technological firms like Intel, known for its manufacturing of PC components, and storage/memory specialists Micron have continued to sell goods to Huawei without declaring that their items are “American-made”, leaving the US Government officials in a dilemma as to how to respond to the situation, with some considering it to be a violation of the “Trump Ban”, while others feel that it would soften the effects of the struggles that US businesses will have due to this situation.

All in all, this trade war will have catastrophic effects for US and non-US businesses that trade globally, especially with the two countries in question, which in turn will affect consumers as well due to rising costs for items, leaving them with little income for daily necessities, while also furthering the negative reputation that the US has as a “stereotypical warmonger”, in which it is upsetting from a civilian perspective, as they will be continue to be inadvertently/falsely smeared to be as wretched as their political officials (remember Muslims and 9/11, and how Muslims were smeared during that time anyone?).

In short: nobody really wins from this absolute travesty. I’m out.

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