Trump ups the ante in his trade war with China

US president overplays his hand, blacklisting tech firm Huawei

US president Donald Trump and first lady Melania Trump. Photograph:  Brendan Smialowski/AFP/Getty Images

US president Donald Trump and first lady Melania Trump. Photograph: Brendan Smialowski/AFP/Getty Images

 

Donald Trump arrives in Japan this weekend for his second trip to the country as president.

But it will be his visit again next month which will be more closely watched.

The US president will return to the country for the G20 summit in Osaka in late June. On Thursday he confirmed that he will meet Chinese premier Xi Jinping at the gathering.

June 28th seems a long way away, but investors and analysts seem to be coming around to the idea that Washington is in for the long haul when it comes to trade tensions with China.

Washington’s war on Beijing, which has grown incrementally since Trump first imposed tariffs last year, shows no sign of abating soon.

Though Trump’s announcement of a $16 billion bailout for farmers on Thursday – his second multibillion-dollar bailout for the agricultural sector to compensate for trade losses – suggests that politically he may be feeling the heat, there have been no signs in the polls of his support slipping among his supporters.

Even Democrats are grudgingly supportive of his moves. In a rare instance of bipartisanship, Chuck Schumer, the top Democrat in the Senate, has been cheering on Trump from the sidelines. “Hang tough on China, President @realDonaldTrump. Don’t back down. Strength is the only way to win with China,” he tweeted earlier this month.

This week however, Trump significantly upped the ante, with the announcement that the US has blacklisted Huawei. Though the administration cited national security concerns, Trump suggested on Thursday that Huawei could be included in trade talks.

Using Huawei as a pawn in the trade war is risky business but if it succeeds in restoring one of the world’s biggest tech companies to the global trading system, it is likely to be welcomed.

Given the complexity and interconnectedness of the global tech industry, and the likely impact of a ban on US companies, the Trump administration may quickly learn that they have overplayed their hand when it comes to banning one of the world’s largest mobile phone makers.

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