Why is Huawei the real trade war target?

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Editor's note: Tom Fowdy is a UK-based political analyst. The article reflects the author's views, and not necessarily those of CGTN.

The arrest of Huawei's Meng Wanzhou in Vancouver on Thursday ignited a surge in discussion and debate concerning Washington's motivations towards the Shenzhen company. The timing of the incident was hardly coincidental. It has happened in tandem with a number of other high profile moves the White House has made against the company in recent months.

Only a week or so prior, the story was pitched to high profile news outlets around the world that the United States was pressuring a number of allied countries to drop Huawei's role in the construction of new 5G networks, accusing the company of espionage on behalf of Beijing.

When this is then examined in light of the Trump administration's trade war and other hardening stances against Beijing, it becomes very evident that there is a very specific agenda against the firm by the administration.

Huawei CFO Meng Wanzhou (L), who was arrested on an extradition warrant, appears at her B.C. Supreme Court bail hearing in a drawing in Vancouver, British Columbia, Canada, December 7, 2018. /VCG Photo

What might that be? Huawei is, in fact, the center stage of U.S.' trade and geopolitical agenda. The trade war is not solely about deficits or low-end manufacturing goods, it is an active attempt by the United States to preserve its dominance in global technology chains and maintain the upper hand in international markets. The rise of Huawei, a company that has proliferated so rapidly across the world, poses a threat to this.

By actively seeking to dismount the company's rise, disqualify its products from leading consumer nations and discredit its reputation in cynical ways, it serves to become part of a wider concert in the effort to stall China's growing technological competitiveness altogether and prevent it from breaking through into the top of global value chains.

This trade war has always been about technology and capability. Trump talks in terms of deficits and American jobs, but this simply political theater in order to help ordinary people support it. To Trump's credit, he is indeed a very effective communicator in this area.

Members of the public enter the B.C. Supreme Court bail hearing of Huawei CFO Meng Wanzhou, who is held on an extradition warrant in Vancouver, British Columbia, Canada, December 7, 2018. /VCG Photo

However, on an administrative and strategic level, he and his cabinet see this situation quite differently. They don't care about low-end manufacturing in China. The import of let's say, cheap clothing, plastic toys, stationery and so on, those things are not perceived as a challenge to Washington's dominance. The fact is that China does not want to be relying on producing those kinds of things forever.

As China's economic growth progresses, one of its biggest needs is to move beyond base manufacturing and move up “supply chains” to become an innovator, rather than simply a producer of goods. Whilst the existing model has served China well for over 30 years, in order to make the jump towards being a fully developed country, a greater edge on technology, science and innovation is required.

Media and public wait at the British Columbia Supreme Court to cover the trial of Meng Wanzhou, the chief financial officer of Huawei Technologies on December 7, 2018, in Vancouver BC. /VCG Photo

The Chinese government has subsequently placed emphasis on this form of development and thus within the past decade, Huawei has risen to become a globally competitive producer of telecommunications technology and smartphones, right up to the extent of challenging leading global brands such as Apple.

As this has happened, Washington has grown to see the company, and China as a whole, as a threat to its technological dominance. For many years the United States was willing to accept Huawei's growth under a misleading belief that China would evolve in the way they desired. Thus, when relations were stable it was permissible to share technology with China and allow the company's international expansion.

However, when it became evident that Beijing would instead follow its own path, tensions began to rise accumulating in the stance of the present. Thus, the trade war is not about the simple things, but it is more an expression of the fact Washington has decided that they do not want China to become a country on level technological capability with them.

Thus, from once being willing to accept a technological engagement with China in these areas, Washington has shifted to sector-specific containment. Probably, this is one of the primary motivations of the trade war. As a consequence, Huawei is taking the center stage.

Thus, the administration is resorting to bludgeon tactics in purposefully damaging its reputation, raising the costs of its products in the U.S. and moving to shut it out of western countries.

Thus, as trade war negotiations continue in the 90-day period set by China and the United States, technology is going to play a key part in the process. They are targeting Huawei aggressively nevertheless. The trade war is at its heart, a technology war.

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