Commentary: No winners in a US–China technology divide

The Trump administration sees malicious uses underlying dependence on both apps. According to Secretary of State Mike Pompeo, utilising Chinese social media tools leaves massive amounts of personal data vulnerable to exploitation by Chinese intelligence, though both parent companies deny these allegations.

In response, Beijing is threatening to block the sale of TikTok’s assets by withholding approval of Chinese export licenses for sale of China’s commercial technologies to US firms.China’s Ministry of Commerce has also announced new restrictions on the export of technologies that can be used for analysing personal information. In the competitive world of social media and e-commerce, Chinese companies grasp that turnabout is fair play, and that they are not without leverage.

Moreover, his unilateral imposition of new tariffs, initiated in 2018, failed to recognise that China would impose retaliatory tariffs of its own. Trump remains unwilling or unable to grasp that tariffs are a tax on US consumers and US companies, representing a dual liability to the United States.The investment outlook is even more sobering. Chinese outbound investment to the United States surged to record highs in 2016, but has since plummeted to 2010 levels.

In the longer run, the administration seems intent on strategic separation and economic decoupling from China, especially in high technology areas. This includes Huawei, a leader in telecommunications gear and already well advanced in its 5G ambitions. Punitive sanctions are an additional weapon in the administration’s arsenal. These are aimed at senior Chinese officials held responsible for policies that the United States deems objectionable or illegal, at commercial entities accused of technology theft, and at firms with substantial assets in the United States.

Trump and his advisers seem to believe that punitive policies will slow China’s advance, and that characterising China as the preeminent threat to the United States will benefit Trump’s re-election prospects.

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