The Biden administration has significantly stepped up its high-tech economic warfare against China with the announcement by the Commerce Department on Monday of a ban on the use of Chinese-made software in cars and other vehicles.<\/p>\n\n\n\n
The ban to come into effect from 2027 follows an investigation by the department into internet-connected software which is becoming an increasing feature of new auto production.<\/p>\n\n\n\n
It was justified on so-called \u201cnational security\u201d grounds with National Security Adviser Jake Sullivan issuing a statement outlining the supposed dangers.<\/p>\n\n\n\n
\u201cCars today have cameras, microphones, GPS tracking and other technologies connected to the internet. It doesn\u2019t take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of US citizens,\u201d he said.<\/p>\n\n\n\n
This bellicose announcement was the starting point for Commerce Department secretary Gina Raimondo when she briefed reporters before announcing the ban the following day.<\/p>\n\n\n\n
\u201cThis is not about trade or economic advantage. This is a strictly national security action,\u201d she told reporters in a conference call. \u201cWe are focused on the national security threat, very real threat, that connected vehicles pose to our country and the American people.\u201d<\/p>\n\n\n\n
Commercial and economic interests, however, are very much to the fore and are completely intertwined with \u201cnational security\u201d as the Biden administration deepens its confrontation against China.<\/p>\n\n\n\n
In her briefing Raimondo pointed to the example of Europe where Chinese vehicles are rapidly expanding their market share as a \u201ccautionary tale.\u201d \u201cWe know the Chinese playbook, they will subsidise, so we\u2019re not going to wait until our roads are filled with cars and the risk is extremely significant.\u201d<\/p>\n\n\n\n
The issue of subsidies is continually raised by the proponents of the US economic warfare to try to cover up the fact that Chinese-developed technology is often well in advance of that developed in the US and Europe.<\/p>\n\n\n\n
As the New York Times report on the ban acknowledged: \u201cThe proliferation of electronics in cars presents a quandary for policymakers and automakers. China is an important supplier of technology like lidar, which uses light to detect objects and is critical to many driver-assisted systems. Chinese automakers have also developed some of the most advanced autonomous driving systems.\u201d<\/p>\n\n\n\n
According to a report in the Financial Times, based on data collected by the consultancy firm Gartner, which charts the digital performance of automakers, \u201cglobal carmakers from Toyota and Volkswagen to General Motors have fallen behind Tesla and Chinese rivals in developing the software to power their vehicles, threatening their ability to secure bigger profits in the electric vehicle era.\u201d<\/p>\n\n\n\n
As the Biden administration began stepping up its high-tech bans on China, it claimed that these were confined to strategically important goods and not aimed at the broader economy. The US was attempting to erect a \u201chigh fence around a small yard,\u201d it claimed.<\/p>\n\n\n\n
This fiction is being rapidly exposed. As the chief executive of the Center for a New American Security, Richard Fontaine, told the Times: \u201cOn China tech, it\u2019s clear that the \u2018small yard\u2019 in growing in size and will continue no matter who wins the election in November.\u201d<\/p>\n\n\n\n
The expansion is inherent in the very basis of new technology, connected with the internet and using artificial intelligence. A wide range of products coming on to the market can be deemed to have \u201cnational security\u201d implications.<\/p>\n\n\n\n
Furthermore, irrespective of the nature of those products, the development by China of what president Xi Jinping has called \u201chigh quality productive forces\u201d is regarded as an existential threat to the economic dominance of the US.<\/p>\n\n\n\n
Having fallen behind China in the development of more productive means of manufacture because of the financial parasitism of many American firms, ranging from Apple, Boeing and the giant pharmaceutical companies, the US is resorting to economic nationalism backed by economic warfare and increasing military threats.<\/p>\n\n\n\n
This was underscored in a comment by the director of Biden\u2019s National Economic Council, Lael Brainard, on the latest decision.<\/p>\n\n\n\n
\u201cThe Biden-Harris administration believes the future of the auto industry is made in America by American workers,\u201d she said. The announcement \u201censures that Americans drive the car of their choice safely and securely, free from risks posed by Chinese technologies.\u201d<\/p>\n\n\n\n
Of course she failed to mention, as was outlined by the whistle blower Edward Snowden, that US citizens are spied on and monitored every day by \u201cAmerican technologies\u201d employed by the NSA.<\/p>\n\n\n\n
A Harris administration will extend the economic warfare. After denouncing the tariffs introduced by Trump during its presidency, Biden maintained virtually all of them and developed them much further, with one of its most significant decisions being the imposition of a 100 percent tariff on Chinese electric vehicles earlier this year.<\/p>\n\n\n\n
The latest moves by the Commerce Department, which will be finalised after a 30-day period of comment and are intended to be in place before Biden leaves office, are certain to be extended.<\/p>\n\n\n\n
Department officials said it was assessing other industries that could warrant similar action, including drones and the infrastructure of cloud computing.<\/p>\n\n\n\n
In his campaign for the presidency, Trump has made clear that tariffs are at the centre of his economic agenda, maintaining that further tax cuts for the wealthy and corporations can be financed out of tariff revenue\u2014harking back to the 19th century when tariffs were the main source of government revenue. He has proposed a 10 percent tariffs on all imports, possibly 20 percent and a 60 percent tariff on Chinese imports.<\/p>\n\n\n\n
Coupled with his fascistic attacks on immigrants, who are viciously scapegoated for all the problems confronting American society, Trump claims his tariff measures will deliver \u201clow taxes, low regulations, low energy costs, low interest rates and low inflation\u201d so that \u201ceveryone can afford groceries, a car and a beautiful home.\u201d<\/p>\n\n\n\n
He continually presents tariffs as a tax on \u201cforeign\u201d producers who have been \u201cripping off\u201d the US. In fact, they are a tax on consumers who are forced to pay a higher price for the necessities of life.<\/p>\n\n\n\n
According to calculations by the Peterson Institute for International Economics, an across-the-board tariff of 20 percent plus a 60 percent tariff on Chinese goods would lead to an increase of $2,600 a year in what the average household pays on goods and would disproportionately hit the lower-income households Trump claims he is protecting.<\/p>\n\n\n\n
Trump\u2019s \u201csnake oil\u201d economics, directed to the domestic front, also has a sharp international edge. In a recent stump speech in Wisconsin followed by an address to the Economic Club of New York earlier this month, he focused attention on what is one of the fears of the US political elite on both sides of the aisle.<\/p>\n\n\n\n
The concern is that the status of the US dollar as the global currency, which has made it possible to run up debts not possible for any other country, is being undermined.<\/p>\n\n\n\n
Trump told his Wisconsin audience those countries which attempted to move away from the dollar in their international transactions\u2014there are a number of them moving in that direction in the BRICS grouping\u2014would be severely hit.<\/p>\n\n\n\n
\u201cI\u2019ll say, \u2018you leave the dollar, you\u2019re not doing business with the United States. Because we\u2019re going to put a 100 percent tariff on your goods.\u2019\u201d<\/p>\n\n\n\n
He underscored the importance of maintaining dollar supremacy in his New York address a few days later. \u201cIf we lose the dollar as the world currency, I think that would be the equivalent of losing a war,\u201d he said.<\/p>\n\n\n\n
The aggressive nationalism of Trump has caused concern for at least one of his most ardent supporters, the economist Arthur Laffer. He is the author of the infamous Laffer curve, reputedly laid out on the back of a table napkin at a restaurant in the 1980s, that tax cuts would pay for themselves because they would increase economic growth.<\/p>\n\n\n\n
Denounced by George Bush senior as \u201cvoodoo economics,\u201d it nevertheless became the basis for Reagan\u2019s economic program which ramped up US debt and forms the basis of Trump\u2019s tax cut plans.<\/p>\n\n\n\n
Today, however, Laffer has expressed major concerns about the Trump tariff plan in comments to the Financial Times, emphasising the importance of trade, and pointing to where it is leading.<\/p>\n\n\n\n
\u201cAll of this stuff of sanctions and threats of tariffs and all that stuff is not the right way to go. That\u2019s a way of guaranteeing World War Three.\u201d<\/p>\n\n\n\n
His remarks apply no less to the Democrats, who, as the latest decision reveals, are just as committed as Trump, if not more so, to economic warfare and its potential military consequences.<\/p>\n\n\n\n