Included in the problematic legacy that Donald Trump left for Joe Biden are the meager results of Trump’s erratic strategy for containing China’s technological rise.
As he did with trade, Trump put his bet on sanctions, prohibitions and intimidation in his attempt to beat China. He failed on both fronts. With respect to trade, he ended up increasing the bilateral trade deficit with China.
Meanwhile, on the technology front, the U.S. did not succeed in slowing the impressive pace of the Chinese advance. The telecom giant Huawei, singled out by the U.S. as a symbol of this rise, looks stronger than ever as the global leader in 5G networks.
Trump systematically accused Huawei of being a threat to U.S. security, on the pretext that the company would spy in third countries on the orders of the Chinese Communist Party.
No evidence was ever presented to that effect. Trump likewise pushed an international boycott against Huawei, trying to get historic U.S. allies to ban the company in their calls for tenders for 5G.
What is certain is that, in addition to the U.S., just eight countries have followed Washington’s line up to now. Huawei has already signed more contracts for 5G than any other telecommunications company, and half of them are for networks in Europe.
The U.S. has not even been able to persuade any of its important, close allies. For instance, Canada and Germany are as yet hesitating to confirm wide-ranging restrictions on Huawei.
The company is also participating in the 5G networks of NATO members, such as Hungary, Iceland, the Netherlands and Turkey, among others. With a presence in more than 170 countries, Huawei’s global reach is grounded in the high quality and competitiveness of the products and services that it offers.
Parallel to the failed international boycott, the Trump administration took advantage of the U.S. dominance in semiconductors — which it shares with its informal ally, Taiwan — in order to squeeze Huawei, which is very dependent on those critical supplies. Anticipating this, the company had accumulated important stockpiles, which lessened the impact.
What is more, all Trump accomplished was to speed up China’s plans to achieve self-sufficiency in this sector. China has increased domestic production of semiconductors by 80% in the past four years, with the company SMIC taking the lead. Meanwhile, the Chinese government has launched a massive incentive program to nurture new “national champions” in the area of technological innovation.
Biden has taken note of this failure. The Democrat has recognized that to compete with China, what is important is not only the restrictions, which in fact he has maintained and increased. Rather, a real revolution in investment will also be necessary to support U.S. technology companies.
The stimulus packages, like the Endless Frontier Act, recently approved with a broad bipartisan consensus in Congress, are working toward that goal. It is clear that, beyond the failed Trump strategy, one of the principal reasons that the U.S. has had little success in persuading other countries to ban Huawei is that, so far, the U.S. has not offered a competitive alternative. The U.S. does not have now, nor will it have in the near future, a company that can go head to head with Huawei in the 5G race. For now, the U.S. can at best continue blocking the competition.
In conclusion, there is no doubt that Huawei is easily winning the global 5G race. The U.S., which has made this a central issue in the geopolitical dispute with China, appears to be lagging in the competition. Nevertheless, there is still a long road ahead, with the future competition for 6G already on the horizon over the next 15 years.
Patricio Giusto is the director of the Sino-Argentine Observatory, professor of post-graduate studies of contemporary China at the Catholic University of Argentina and visiting professor at the University of Zhejiang, China.
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