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Growing tech protectionism on the cards?

Last week saw a significant escalation in the trade and tech war that’s been on-going between the US and China.

The Trump administration’s decision to block global chip supplies to Huawei Technologies, means that companies must now get a licence to sell to Huawei any ICs which are, “the direct product of certain US software and technology.”

The news came after chip manufacturer TSMC said that it was to build a new factory in Arizona, in a move designed to address US worries over its reliance on Asian fabs for advanced chips.

Both announcements are stirring up fears of Chinese retaliation and the authorities in Beijing are now threatening to add US companies to its list of “unreliable entities,” imposing restrictions on or investigating US companies such as Qualcomm, Cisco and Apple, and suspending purchases of Boeing aircraft.

All of this suggests that we could be moving towards a period of technology protectionism, anti-globalisation and a switch in development strategies, away from integration to more independent development.

Things will only get worse if, and when, China responds. But, with the news that TSMC will no longer supply Huawei, that retaliation is likely.

Author
Neil Tyler

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