“Trade War turning to Tech War”
SCB Report US-China Trade War Turning to Disrupt Huawei-China Tech Leadership.
28-12-2018—Today SCB Make Sense the Bi-Weekly global economic and investment impact unveiled the report “From Trade War” to “Tech War” that the US-China trade war can turn to tech war that can turn Huawei to be boycotted by US and alliance and turn Huawei down from technology leadership that will be significant impact to global technology supply chain.
The report concluded that “Trade War” situation in 2018-2019 “is turning into Tech War”.
There are two interesting issues related to the situation;
1) Trade War tend to be less serious impact on global supply chain since if US continue raising its import tariff, it could affect US own economic because most of the products on the list that US announced to raise import tariff are consumer product and higher import tariff will affect US consumers. Raising the import tariff didn’t make less but more US trade deficit against China because US economy remain strong and import 10.4% more from China in 2018’s first 9 months and tend to make record high trade deficit this year. Then China tend to regulate each industry or each company instead of to raise import tariff, then it will not impact much to global supply chain.
2) Arrested Huawei CFO issues, if US strictly control by urging alliance countries to join boycott Huawei’s products and/or network. It could be some significant affect to Huawei’s operators, including the global technology leadership of Huawei in the future, if US official make prohibition command to their business, not allow to make purchasing transaction with Huawei (the same as they did to ZTE, the second technology company of China) it could make some significant affect the business of technology production supply chain. Because producing Smart Phone, Huawei must use the chips producing in US such as Intel and NXP, including from US security alliance countries such as UK, Japan, Taiwan, South Korea ., etc. If these countries proclaim to boycott Huawei, it might make the companies that used to be the key supplier of Huawei such as ASE, LG Display, Sunny Optical, TSMC and Qualcomm have to stop doing business with Huawei. This will make the companies being important clients of Huawei and have to rely on Huawei as the production supply chain such as Chinasoft, BYD Auto, Foxconn, TSMC and SK Hynix must be facing parts shortage problem in their production. In short term this can disrupt technology production supply chain and in the next term it could affect China’s technology leadership, because Huawei’s customers and suppliers and China’s manufacturer might avoid doing business with China’s technology company in the future.
