中文
The U.S. Capitol building in Washington, D.C., the United States, January 19, 2023. [Photo/Xinhua]
By Abu Naser Al Farabi
On May 24, the founder and CEO of U.S. computer giant Nvidia Jensen Huang, warned that the U.S. tech industry is at dire risk of "enormous damage" from the escalating battle over chips between Washington and Beijing, the Financial Times reported. In the interview, Huang grudgingly lamented the Biden administration's semiconductor export controls to China, saying the U.S. chip curbs intended to hobble China's tech advancement had left the Silicon Valley company with "our hands tied behind our back."
Bewailing the company's inability to sell advanced chips in the Chinese market – one of the company's biggest markets – due to Biden's unilateral and techno-nationalism-driven measures, Huang asserted, "If [China] can't buy from … the United States, they'll just build it themselves," he said. "So the U.S. has to be careful. China is a very important market for the technology industry," according to the report.
Huang's warning is not something novel. From the very start of former U.S. President Donald Trump's trade warfare to Biden's no-holds-barred economic and technological coercion against China, economic pundits, tech experts, and professionals have persistently been warning, even illustrated with empirical figures, of substantive damage that such nonsensical containment have done to U.S. companies and the U.S. economy as a whole.
Back in the beginning, for instance, Trump's "good and easy to win" tariff war from 2018 imposed tariffs on over $300 billion of U.S. imports from China and raised the average tariff from 2.7 percent to 17.5 percent. Throughout Trump's tariff war, something that mostly remains in place, in some cases intensified under the Biden administration – U.S. companies and U.S. citizens largely paid the price.
For example, research from the Federal Reserve Bank of New York and Columbia University found in 2020 that U.S. companies lost at least $1.7 trillion in share prices since 2018 as a result of U.S. tariffs imposed on imports from China. As a result, it forced companies to accept lower profit margins, cut wages and jobs for U.S. workers, defer potential wage hikes or expansions, and raise prices for American consumers or companies, eventually shifting the brunt of the tariffs on American consumers.
Economists Mary Amiti, Stephen J. Redding, and David Weinstein showed that by the end of the first year that the tariffs took effect, U.S. real income declined by $1.4 billion per month. Even the latest U.S. Trade Representative statutory four-year review of the Trump administration's Section 301 tariffs – the former president invoked to impose tariffs on Chinese imports against the very spirit of free trade and international trade rules and norms – concluded that those tariffs have not only failed to achieve their objectives – apparently to give the U.S. economy a leg up but have hurt U.S. businesses and consumers along the way.
Fast forward to the current administration, such evidently astronomical "self-inflicted harm" to U.S. businesses and Americans resulting from the trade war against China could not even put any restraints on the U.S.' desperate drive to contain China. Instead, it got worse under the Biden administration. Washington last October imposed sweeping export controls designed to stifle the transfer of semiconductor equipment, devices, and know-how to China, with a stated aim to halt China's rise and salvage the U.S.' already eroding economic and tech competitiveness.
All of those happened despite repeated warnings from tech experts and insiders. Ignorant of the complex nature of the semiconductor ecosystem, bullheaded in stifling China's technological ascendance, and most notably, whimsical to the monumental damages of such decoupling measures, techno-nationalist China hawks in Washington have pressed harder, riding on rare bipartisan Sino-phobic frenzy and little proven "national security threat" claims.
Washington's "all-in" technological decoupling efforts against China have already undermined the bilateral relations in two ways – squeezing the space for mutual dialogue to resolve the issues rattling healthy coexistence and chipping away at the prospect of much-needed collaboration in technology to fix critical shared and existential global challenges to the world, like climate change, poverty reduction, etc.
In the short term, Washington's technological coercion could at best hobble China's technological advancement. But in the mid and long run, given China's market lucrativeness, future economic prospects, inherent innovative advantage, high-quality demographic capital, and, most predominantly, coherent state-driven policies toward achieving preeminence with state-of-the-art technologies, China will emerge resilient and self-reliant.
It is true, the U.S. holds reduced but still substantial market dominance on critical technology, particularly on chip manufacturing equipment and software. But the growing tendency of de-dollarization across much of the world and de-Americanization, more broadly, de-Westernization of the global financial system, have demonstrated that the weaponization of specific comparative advantage will only lead to diminished strategic leverage, eventually with less credibility and power to influence.
Abu Naser Al Farabi, a special commentator on current affairs for CGTN, is a Dhaka-based columnist and analyst focusing on international politics, especially Asian Affairs.
