The US-China trade war has never made much sense to mere mortals. It reminds us too much of the quote about giving with one hand and taking away with the other.
The most recent twist in the trade war is news that China’s largest ride-hailing firm Didi Chuxing has appointed Morgan Stanley and Goldman Sachs to manage the company’s IPO in the US, as early as July and with a valuation of possibly $100 billion.
If Didi were an American company, you would be impressed. That the company is Chinese, to the point of having ‘Beijing’ written through it like a stick of candy, makes your brain twist.
The sanity of this and many other events in the trade war is further thrown through the asylum windows with news that the US has added seven Chinese companies to the economic blacklist. These companies make supercomputers, so obviously, they are building them solely to spy on US administrations. Not.
If you can get your head around that little puzzler and the now long list of Chinese tech companies blacklisted in the trade war, your focus is pulled to the issue of chips.
These tiny engines drive everything that we now think of as necessary to our lives. From kettles to cars, computers to camping kit, the assumption is that chips are making it all ‘intelligent’.
Setting aside the political hot potato that is Taiwan, which lies at the centre of the issue, the new restrictions around chips has caused possibly the greatest disruption to the tech world. Ever.
Car manufacturers are having to cut production because of the shortage. Tech giants are announcing billion-dollar plans for new chip manufacturing facilities. And governments, even those not directly in the ebb and flow of this trade war, are throwing billions of dollars at the problem of chip shortages and luring chip-making companies to their shores. Even the European Union is actively discussing what to do.
It is a crazy situation and the new regime in the US, far from slowing down or reversing it, seems to be continuing the direction of travel started by the Trump administration. It is hard to imagine how this trade war could get any stranger.
But we are sure it will.