PerspectiveHuawei and the U.S.-China supply chain wars: The contradictions of a decoupling strategy

Published 3 June 2019

In two dramatic policy announcements last month, the Trump administration effectively barred U.S. companies and government agencies from buying telecommunications equipment or services from – or selling any components to – Chinese technology champion Huawei. President Donald Trump signed a broadly phrased executive order restricting any transaction of information communication technology (products or services linked to a “foreign adversary” deemed to pose an “unacceptable risk to the national security of the United States”), while the Commerce Department placed Huawei the company and its affiliates on its Entity List – a designation that requires U.S. firms and foreign companies selling products that contain American components to acquire a license from the U.S. government before trading with a blacklisted company. Darren Lim and Victor Ferguson write in War on the Rocks that these moves represent the latest steps towards “decoupling,” the unwinding of the interlocking supply chains and trading relationships that have made the U.S. and Chinese economies so deeply interdependent over the past two decades. Whether deliberate or not, the restrictions on Huawei have prompted some to argue that we are witnessing the collapse of an open, global market for information communication technology goods and services. Others cite the new policies as the latest confirmation of an emerging “economic” or “technology” Cold War between China and the United States.