America’s Trade War Protectionism will Have Dire Consequences for Decades to Come

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America’s brand was already quite degraded before the 2016 administration. Trade deal negations and “trade wars” with China are particularly dangerous for America’s future. The reality is the POTUS is upset that China has damaged the U.S. with significant corporate espionage and theft of patents and technology ideas for years.

If Russia hacked democracy, China most certainly hacked Silicon Valley and will soon eclipse it with its own Technology dynasty. The way Tencent, Alibaba and Baidu (BAT) invest in technology startups aligned with the Chinese Government is much more sophisticated than the sexist version of Silicon Valley venture capital we have in place.

However the trade-war rhetoric could damage America for years to come. This is because China is on the incline in technology, apps, artificial intelligence, E-commerce, super computing and many other verticals. America circa 2025 won’t be able to keep up. Trump’s version of playing “hardball” is out of touch with the future, a future where Donald Trump is probably not even alive any longer.

Between Softbank’s Vision Fund and how collaborative it really is, and China’s Tech Dynasty, American innovation is drying up with an internet Duopoly that monopolizes the future of the Western internet. Microsoft, Facebook and Google all clamored to get into China and serve the Chinese Government, because they realize that’s where the future is and the most important consumer market in the world. Microsoft and Google have been working on products where censorship can take place, can be built into their products. Facebook years ago already developed such a product for China, in the hopes of getting into the market.

Yet in America Huawei, arguably one of China’s fastest rising brands and tech companies, is blocked and banned from entering the U.S. market in a systematic national security and technology alliance against China. America can’t have it both ways. Capitalism and protectionism don’t go together, it’s a free-market system. Threatening tariffs against China and their products is artificially lowering the Chinese currency, and while it’s short-term pain for China, they won’t forget it.

China will use their future economic and technological superiority with retribution in the future because of how their companies are starting to scale globally. In the future of 5G, retail, ride-sharing, and O2O consumer delivery, China is well placed to match and exceed America’s growth globally. Huawei’s increasing smart phone sales share of the market is ample evidence of that.

On August 3rd, 2018 China announced it is prepared to hit the U.S. with new tariffs on $60 billion in goods. The duties would range from 5% to 25%, Beijing’s Commerce Ministry said in a statement, and would be imposed if the U.S. decides to up the tax on $200 billion in Chinese goods from 10% to 25%. “The implementation date of the taxation measures will be subject to the actions of the U.S.,” according to China’s release.

Trade-war retaliation might favor the U.S. in the short-term but long-term retaliations means it’s starting a technological cold-war with China, an arms race to AI that it can’t possibly win. To say that this is poor policy and diplomatic leadership for America’s future is an understatement.

China has been very clear that this is dangerous for the global economy as well:

“Any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties,” China’s statement said.

China has shown restraint, patience and understanding in dealing with a wild-card inflammatory U.S. President. “The implementation date of the taxation measures will be subject to the actions of the U.S., and China reserves the right to continue to introduce other countermeasures,” China’s release said, according to a translation.

What America does not seem to understand is this sets a dangerous precedent of cyber-security and trade-policy warfare with what amounts to the next superpower of the Earth. China will by default be the economic and technological leader in the years 2030–2050. America doesn’t have the ability (future talent), the manpower (size of the workforce) or the economic capability (deep pockets) to match how China turns into New China.

  • America has systematically blocked and banned Huawei from selling phones in the U.S., which has made Apple look good, but created a degree of rivalry that will only spur Chinese tech companies on.
  • America has initiated trade-policies and tariffs that will backfire in the long-run as China becomes more aggressive in its political, economic and technological global influence.
  • The Chinese once again stressed that because the U.S. has repeatedly escalated the situation, despite the interests of both enterprises and consumers, China has to take necessary counter-measures to defend the country’s dignity and the interests of its people.

What this amounts to for America in the future, is losing the AI-arms race to China, and ALL that it entails.

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