Trump May Give China What It Wants Most To Seal $1.2 Trillion Trade Deal

Image Source: The Bearded Patriot

President Donald Trump may have just answered the biggest question about the China trade deal talks. The negotiations seem focused entirely on what China will do for the U.S. — buy up to $1.2 trillion more American goods, provide intellectual property protections, open its markets. So what will Beijing get for a “mutually beneficial, win-win agreement” that Chinese President Xi Jinping has promised? The apparent answer is freeing Huawei to seek global domination in 5G wireless networks.

Trump’s implicit embrace of Chinese technological competition and his rejection of U.S. government-imposed barriers sets the stage for what increasingly looks like it will live up to the “very big deal” he has touted. Steps toward finalizing a China trade deal could come Friday afternoon, as Trump meets Chinese Vice Premier Liu He in the White House. CNBC reported that the sides are eyeing a Trump-Xi summit at Mar-a-Lago in late March. Trump said Friday that he and Xi may hash out the final points, but perhaps not.

The Dow Jones came off intraday highs as Trump made his comments, but rebounded to close at session highs, sealing a ninth straight weekly advance. The Dow Jones and other stock indexes have been rallying on China trade deal hopes.

Trump 5G Networks Tweets Significant

“I want 5G, and even 6G, technology in the United States as soon as possible. It is far more powerful, faster, and smarter than the current standard,” Trump tweeted on Thursday. “American companies must step up their efforts, or get left behind.”

Trump added: “I want the United States to win through competition, not by blocking out currently more advanced technologies.”

Trump Signals Tech Cold War Truce

That last statement spoke volumes and seemed directed at one of the most contentious issues standing in the way of a lasting U.S.-China trade truce: the possibility that the geopolitical rivalry between the two countries could turn into an economically disruptive technological cold war.

Trump’s 5G competition tweet didn’t specifically mention China or Huawei. But it’s hard to imagine that he didn’t have them in mind. It’s the height of China trade talks. Further, Trump has been expected to sign an executive order banning Chinese telecom gear from U.S. wireless networks.

Meanwhile, the U.S. has formally requested the extradition from Canada of Huawei CFO Meng Wanzhou for flouting U.S. sanctions on Iran.

No 100% Fix For Huawei 5G Wireless Networks

In truth, there isn’t much of a middle ground between unfettered competition and a technological cold war. That’s because most advanced technologies, from chips to artificial intelligence, have both commercial and military applications. The U.S. could deprive China of the most advanced chipmaking equipment. But that could spark reprisals by Beijing that would disrupt global supply chains and harm the global economy.

The reality is that building out 5G networks that are Huawei-free is much easier said than done. “The U.S. still hasn’t developed an alternative, Huawei-free vision for the massive, complicated and high-stakes global 5G buildout,” Politico has written.

The U.S. has been leaning on other countries to ban Huawei gear from their 5G wireless networks. But if Trump doesn’t ban Huawei gear at home, he would signal the rest of the world that China is open for business.

At best, Beijing hopes to get a clean slate from a China trade deal, turning the page from accusations of stealing commercial technology secrets and spying. It’s willing to increase purchases of U.S. goods by a huge amount and open markets to some extent. But Beijing hopes to emerge from the China trade talks without giving up on its now-softer-spoken Made in China 2025 goal of state-funded, global advanced technology leadership.

Author: Jed Graham

Source: Investors: Trump May Give Beijing What It Wants Most To Seal $1.2 Trillion China Trade Deal

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