Trump and Huawei: We’ve Been Here Before

I’ve run a series of articles on Donald Trump and continue my critique of the US President.

Make no mistake. Trump is pushing the world to the brink of disaster.

What he is doing is uncalled for. Real negotiations result in win-win situations. Not the win-lose scenarios that have typified just about all his meetings so far.

Let me explain.

Take the arrest of Huawei Chief Financial Officer Meng Wanzhou. You may recall the US asked Canada to arrest her as she passed through Vancouver airport. She is charged with violating US sanctions on Iran.

Now here’s a curious thing about that.

Here’s a list — neither exclusive nor exhaustive — of other large institutions and corporations that have also violated similar US sanctions: Banco do Brasil, Bank of America, Bank of Guam, Bank of Moscow, Bank of Tokyo-Mitsubishi, Barclays, BNP Paribas, Clearstream Banking, Commerzbank, Compass, Crédit Agricole, Deutsche Bank, HSBC, ING, Intesa Sanpaolo, National Bank of Abu Dhabi, National Bank of Pakistan, PayPal, RBS (ABN Amro), Société Générale, Toronto-Dominion Bank, Trans-Pacific National Bank (now known as Beacon Business Bank), Standard Chartered, and Wells Fargo.

As Jeffrey D Sachs noted for the Project Syndicate, New York:

None of the CEOs or CFOs of these sanction-busting banks was arrested and taken into custody for these violations. In all of these cases, the corporation – rather than an individual manager – was held accountable.’

And don’t forget JP Morgan either. Again, as noted by Sachs.

In 2011…JP Morgan Chase paid $88.3 million in fines for violating US sanctions against Cuba, Iran, and Sudan. Yet Jamie Dimon wasn’t grabbed off a plane and whisked into custody.’

In my opinion the US action against Meng is provocative. But not out of the ordinary as far as US past behavior goes. The US is driving the trade war currently. Except that it’s not a trade war.

Which is why I headlined this article: Trump and Huawei: We’ve been here before.

Because we have.

A bit of history

Here’s a bit of history for you.

Thousands of years ago, China produced the most amazing silk for export to all parts of the world. The silk products were much loved and highly sought after in much of the known world at that time.

The Chinese secret to silk-making lay in silkworms. The secret was also in their eggs and how they were handled. To preserve this knowledge, China executed any person caught taking silkworms and their eggs out of the country. If you did that, you died.

Nevertheless, China lost the secret to Japanese spies in about 400AD. It’s possibly the first known industrial espionage activity on a large scale. There’s been plenty more since.

Let’s not forget what happened to Britain in the late 1700s. In those days Britannia ruled the waves. And it did so by making continual and strenuous efforts to deny its colonies — of which the US was one — the chance to industrialise through the use of existing British technology.

But the US prospered. And it prospered not only from its vast land expanse, the US stole as much of the latest technology as it could. From both the UK and Europe.

And then it applied that technology — and improved on it — to its newly developing economy. You can see the results today.

So we’re back to Huawei. And China.

And this is where I think Trump has been had. Not by China, but by his own military.

Trump says he’s a ‘tariff man’. His own work history proves that. Trump has over the years voiced an opinion that the US has been taken advantage of in such matters. So he wants to seemingly sort the imbalance the US has in the trade of goods with China. Fair enough then.

But his trade war hawks and the military men around him are seemingly set on another course of action. And that is to maintain the US as the world’s pre-eminent technological and military super power. And to do that unopposed.

We’ve been there before on that, too.

And so Canada was instructed to arrest the Huawei Chief Financial Officer Meng Wanzhou. Thus it seems to me that there is more than just a trade war going on here. A lot of corporations and their CEOs have committed far worse violations of US sanctions than has Meng.

All of this goes in cycles.

It’s as much a part of the Kondratieff wave, as it is the real estate cycle.

Terence Duffy,
Chartist, Phil Anderson’s Time Trader

Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come — which he details in Cycles, Trends and Forecasts.

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