Though the entire world is struggling to contain the Coronavirus, the relationship between China and the US remains complicated. Both countries have made a tentative agreement to halt some tensions at least until the COVID-19 problem is addressed, but the US is pushing anyway. The following three incidents happened this week are fuelling new thoughts of how this relationship will be in the future.
Starting with the US, the department of commerce has announced to restrict Huawei even further. This is through the restrictions laid against those companies supplying hardware and software to Huawei, should obtain licenses for conducting any business with Chinese players. Further, Trump has even extended the last year’s ban of Huawei leveraging American technologies for another year. These steps may thwart Huawei away and widen the gap between China and the US.
Later, the Taiwan Semiconductor Manufacturing Company’s (TSMC) announcement to build a plant in the state of Arizona is another big announcement. TSMC is the world’s largest chip maker. With more than 50% in the world’s chip foundry business, TSMC supplies chips to Apple, Huawei, Google, and even Qualcomm and Intel! Its decision of building a plant worth $12 billion in the US is to fill the space left by China.
Though Washington debated dictating TSMC to cut off from Huawei, TSMC fought back as that would severely impact its R&D income. And building a plant for producing the next-gen chips (5nm) may bring TSMC closer to the US, and helpful for both. While TSMC can skyrocket its business, US corps get critical components for their technologies.
Following this is the Foxconn’s announcement of grounded quarterly profits, which were fallen 90% low due to ongoing COVID-19 lockdowns! Foxconn is the largest manufacturer of technology hardware for many companies including Huawei, Apple, etc. And this downing of a company’s ability is yet another chance for widening the gap between China and the US.
After all, we see the tensions between the US and China aren’t going to settle anytime soon. And the rumors of Coronavirus originating from Wuhan shall further fuel the Trump’s administration fighting against China even after lockdown.