The rise of populist nationalism, of which Donald Trump’s election as US president is the most vivid example, is changing the contours of global politics. Trump proudly calls himself a “nationalist” out to make the US great again, which — not so subtly — says that the US has been short-changed by its leaders at home (before Trump appeared on the scene), and its friends, allies and others abroad.
So, there is need for the US to reset its affairs and institutions to weigh up the gains and losses of its international dealings — be it trade, security relationships, foreign policy or whatever.
In other words, international relations have to be transactional in nature to maximize US gains.
Take the case of China: The Trump version will say that China has acted in an underhand manner in trade relations to amass vast US asset reserves through currency manipulation — although this is no longer said loudly now compared with during the 2016 US presidential campaign — by having low manufacturing costs through depressed wages, keeping Chinese markets restricted or closed through high tariffs, theft of US intellectual property and so on.
In other words, China has not been playing fair, so raising tariffs on Chinese exports to force it into buying more US goods is seen as the way to create a level playing field.
China, of course, does not buy the US narrative and has responded by raising its own tariffs on US exports.
However, following a meeting on Dec. 1 between Trump and Chinese President Xi Jinping (習近平) on the sidelines of the G20 summit in Argentina, it looked like the dreaded escalation of the tariff war might be averted when Trump announced a temporary moratorium on further US tariffs that were due at the beginning of next month.
During this period, the two countries might work out their differences, allowing Trump to claim a victory, with China undertaking to buy more US goods and open its markets. China had been on this path even before the meeting, but nothing concrete and spectacular has happened for Trump to claim a victory in the tariff war and unless Beijing does something, it looks like it might not de-escalate any time soon.
Indeed, if anything, the arrest in Canada of Meng Wanzhou (孟晚舟), the daughter of Huawei founder Ren Zhengfei (任正非), is likely to further complicate US-China relations. Meng is a senior executive of the company. She was arrested in transit at Vancouver airport at the US’ request, allegedly because the company violated US sanctions against Iran. On her extradition to the US, Meng will face criminal charges.
China has reacted strongly, threatening Canada with “grave consequences” if it did not immediately release Meng.
As for the US, a Chinese Ministry of Foreign Affairs statement said: “The actions of the US seriously violated the lawful and legitimate rights of the Chinese citizen, and by their nature were extremely nasty.”
Whether it was coincidental, Meng was arrested on the same day as the Trump-Xi meeting in Argentina. It is reported that even though Trump might not have known about the arrest, his national security adviser, John Bolton, was certainly aware of it.
The question then is: Is the US confident that the 90-day truce between Trump and Xi would hold and lead to some sort of breakthrough to avert the trade war between the two countries, or is Meng’s arrest part of the larger strategic conflict between them?
From the US’ perspective, China is a strategic rival seeking to establish its supremacy across the board, whether it is in trade, its global Belt and Road Initiative or its leap to technology pre-eminence — in which Huawei is the “point man” — as part of Xi’s “China dream” to be the global brand in all sorts of ways.
Whether the arrest of Meng is an isolated event is hard to say, but in the US-China competition, everything is related. Considering China’s sharp reaction to the arrest, it would seem that Beijing might not regard it as an isolated development.
The Global Times called it an act of “despicable hooliganism.”
“Having failed to contain Huawei’s outstanding competiveness in the 5G field [fifth-generation mobile technology] through market means, the US took to arresting its very senior executive,” it said.
According to the Beijing News, the “Five Eyes” security alliance of the US, Canada, Australia, New Zealand and the UK was behind the arrest, which was the latest step in a plan to contain Huawei.
Indeed, at one time it seemed that Huawei might succeeded in wooing one or more of the “Five Eyes” countries (so called because they share their intelligence), but now all five have decided against Huawei’s 5G network, despite its competitive pricing. They fear that China’s technological penetration into their mobile and Internet systems might make their essential utilities and security systems vulnerable to Beijing.
Regardless of whether Meng’s arrest has such wide-ranging implications, it seems that it is part of the wider push by the US to contain China’s ambitions, whether it is in the South China Sea, trade disputes or its expansion from being the factory of the world for cheap consumer goods to a technology leader.
Where this confrontation might take the world remains to be seen, but it portends trouble.
Sushil Seth is a commentator based in Australia.
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