Wednesday, May 15, 2019

You've got to take a punch to land two.

Yesterday, President Donald Trump declared a national emergency which authorises the administration to block telecom equipment "from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services in  the United States". Although the order is against "foreign adversaries" and does not pick out any particular country, there is no doubt that it is aimed against the Chinese company Huawei. This was confirmed when, "The US Commerce Department said on Wednesday it is adding Huawei Technologies Co Ltd and 70 affiliates to its so-called "Entity List" -- a move that bans the telecom giant from buying parts and components from US companies without US government approval." "We are willing to sign no-spy agreements with governments, including the UK government, to commit ourselves to making our equipment meet the no-spy, no back-doors standard," Huawei Chairman Liang Hua said. However, China is expert at manipulating the truth and making promises without any intention of fulfilling them. Any deal with China is one-sided because it breaks its commitments as it pleases and resists measures to reinforce rules as an infringement of its sovereignty. Chinese do not see stealing of intellectual properties of US companies and blocking them from operating in China, while Chinese companies trade freely in the US, as infringement of US sovereignty. "Huawei would have no choice but to hand over network data to the Chinese government if Beijing asked for it, because of espionage and national security laws in the country, experts told CNBC." Australia and New Zealand have banned Huawei equipment. Huawei CEO Ren Zhngfei used to work in the Peoples' Liberation Army, which has specialized units trained to hack into government and business computers, and is a member of the Communist Party. Huawei took out full-page advertisements in the US denying charges of spying and says that the US will lose without its equipment. On the other hand, "Huawei has filed a lawsuit against the US government against a ban that restricts federal agencies from using its products." So, Huawei has the temerity to sue the US government for not getting government contracts but the Chinese government defends its right to deny all foreign companies from getting Chinese government contracts. Having negotiated a large part of a trade deal with the US China decided to rewrite key parts of the deal. Trump increased tariffs to 25% on $200 billion worth of Chinese imports and threatened to impose 25% tariffs on the remaining $300 of imports. Enemies of Trump constantly harp on the fact that tariffs will increase prices for US consumers. True, but, as every boxer will tell you, you must be prepared to take a punch to knock out your opponent. And, US has the best boxers.

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