INTERACTION

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By Joschka Fischer

Last month,
under pressure from US President Donald Trump’s administration, Google
terminated its cooperation with Huawei, thereby depriving the Chinese smart
phone maker of the license to use Google’s Android software and related
services. The move marks both a new pinnacle in the Sino-American conflict and
the end of US-led globalization.

After three
decades of moving toward a single global market governed by the rules of the
World Trade Organization, the international order has undergone a fundamental
change.

The United
States and China are locked in a tariff war that at first seemed to be about
the bilateral trade balance, but has turned out to be about much more. Until
recently, one could find hope in the fact that, despite frequent exchanges of
threats, the two countries were negotiating. Not anymore.

Last month,
under pressure from US President Donald Trump’s administration, Google
terminated its cooperation with Huawei, thereby depriving the Chinese
smartphone maker of the license to use Google’s Android software and related
services. The move poses an existential threat to Huawei.

But, more
than that, it marks both a new pinnacle in the Sino-American conflict and the
end of US-led globalization. The message from the US is clear: technology and
software exports are no longer just a matter of business; they are about power.
From now on, the US will put might over market.

Now that
the conflict has assumed the form of a hegemonic struggle, China may have to
pull out all the stops to protect its national champions. That means
withdrawing as quickly as possible from all supply chains that rely on US-made
high-tech inputs, particularly semiconductors. China would have to start
sourcing all the necessary components domestically, or from safe partners
within its orbit.

In the
medium term, this adjustment would effectively divide the world into two
spheres of economic competition. Sooner or later, all smaller powers dependent
on global markets would have to choose a side, unless they are somehow strong
enough to withstand both American and Chinese pressure. With China and the US
both demanding clarity, even economic giants like the European Union, India,
and Japan would be faced with an intractable economic dilemma.

Assuming
that an open, unified global market does indeed become a thing of the past, the
question, then, will be how China plays its cards. As America’s largest
creditor, would it see a currency war as its ace up the sleeve? If so, an
already dangerous struggle for global technological preeminence would become a
broader and more immediately perilous conflict.

The danger
is not just that economic rivalry, protectionism, and trade restrictions would
threaten global prosperity; it is that these developments also would raise the
risk of a serious political confrontation. Technological sovereignty would take
the place of trade and exchange, and the nationality of corporation’s even
major multinationals would become just as important as their business model.

Still, it
would be a mistake to conclude that this whole conflict was brought on solely
by Trump and his neo-nationalist agenda. Two days after Google announced its
decision, the New York Times published a commentary by Thomas L. Friedman,
author of The World is Flat, echoing many of Trump’s attacks on China’s unfair
trade practices. If that is where the previous ideological high priest of
globalization now stands, China is facing off against not just Trump’s America,
but liberal America, too.

The Trump
administration’s latest move is meant to signal that the US will not hand over
its dominant global position without a fight. Yet by precipitating a break in
the existing trade relationship with China, the US will incur immense costs of
its own. No doubt turbulence awaits Europe, too.

A rupture
in the global economy would pose a fundamental challenge to the European and
especially the German export model. Though the European Union will remain
dependent on the American security guarantee and trade with the US, the bloc’s
exporters have become increasingly reliant on the Chinese market. A scenario in
which they are forced to decide between the two would thus produce a lose-lose
outcome.

True, in a
full-scale technology war, the EU’s value as an ally to the US would increase,
and the risks of punitive US tariffs on European exports would decline. But
European exporters that have become more dependent on China would be squeezed.

Past
experience has shown that Europe usually needs a crisis in order to move to the
next stage of its development. If there is any silver lining in the current
situation, it is that Europe may now have no choice but to develop a
geopolitical strategy for the twenty-first century. The EU was largely spared a
populist upset in the recent European Parliament election.

Now it must
get to work safeguarding its prosperity and sovereignty in an age of
Sino-American rupture. Joschka Fischer was German Foreign Minister and Vice
Chancellor from 1998-2005, a term marked by Germany’s strong support for NATO’s
intervention in Kosovo in 1999, followed by its opposition to the war in Iraq.
Fischer entered electoral politics after participating in the
anti-establishment protests of the 1960s and 1970s, and played a key role in
founding Germany’s Green Party, which he led for almost two decades.