Analysis: China’s shadow looms over US this week

And that was before an apparently tense call on Thursday that lasted more than two hours, during which Chinese President Xi Jinping warned US President Joe Biden that when it comes to Taiwan, “if you play with fire, you will get burned.”

A full diplomatic incident. Tensions are rising over the potential of Speaker of the House Nancy Pelosi. visit Taiwan, an island of 24 million that China considers its own territory, but which has long been a self-governing democracy.
Officials in the US warned Pelosi of the risks of the trip, including pushing China to take further action against Taiwan.

It is not yet clear when Pelosi will arrive or if the trip will take place. She would become the highest-ranking MP since House Speaker Newt Gingrich’s visit in 1997.

The US Navy moved ships to the South China Sea. It was against the backdrop of a possible visit by Pelosi that the US aircraft carrier Ronald Reagan and its strike group returned from the port of Singapore. according to Reuters.
China has become more aggressive towards Taiwan. Reporting on the tense, hours-long conversation between Biden and Xi, CNN’s Kevin Liptak notes that Taiwan has become a key dispute between the countries “as US officials fear China’s more imminent move into a self-governing island.”
Back in May, while in Asia, Biden seemed to be talking a quiet part of US foreign policy when he said out loud that the US would respond “militarily” if China attacked Taiwan.
Stay informed: What you need to know about China-Taiwan tensions.

Although the US does not officially recognize the government of Taiwan, it does sell defenses. weapons to Taiwan is part of a long-standing policy of “strategic ambiguity” in which the US remains unclear about whether it will defend Taiwan in the event of a Chinese invasion.

There are warnings about subversion

Watershed warning regarding technical espionage. CNN recently reported on a thwarted Chinese government plan to fund an ornate garden at the National Arboretum in Washington, D.C., which US officials feared could disrupt US nuclear arsenal communications.

US officials are warning of a sharp increase in Chinese government spying activity.

Read the full CNN exclusive.

There is a major economic dependence

Striving for semiconductor independence. The rare bipartisan agreement to subsidize US semiconductor manufacturing was driven largely by the realization that the US tech sector should be able to operate and produce more independently of supply chains rooted in China.

The bill passed the bipartisan House of Representatives on Thursday and is now heading to Biden’s desk for his signature.
“If China decides to suspend production or prevent Taiwan from exporting or manufacturing its chips, we will have serious economic and ultimately national security problems,” he said. Biden said on Tuesday from the White House while lobbying for the law.

Promoting independence from renewable energy sources. Democrats have waited until the semiconductor bill becomes a slippery slope to bipartisan passage before announcing a deal on another, broader bill they will attempt pass even without the help of the Republicans.

However, the deal announced on Wednesday by Senate Democrats on the health care and climate change bill is partly intended to similarly boost the U.S. renewable energy sector so that it doesn’t rely as heavily on Chinese-controlled materials.

The deal was made possible because West Virginia Senator Joe Manchin bought into it. In a radio broadcast in his home state, he said the bill would help the US develop batteries for electric vehicles.

“We rely on ourselves and Canada, Australia and our beloved countries, not relying on rogue countries and those who harm us or want to harm us,” he said.

Biden may cancel Trump-era tariffs. One of the mysteries of Biden’s economic policy is his failure to reverse the tariffs imposed by former President Donald Trump on China.

Biden is said to be weighing the issue, although according to Liptak’s report, tariffs were not supposed to be the main topic of discussion between him and Xi. Removing tariffs may be politically unpopular at first glance, but it could help ease some of the inflation that has come to dominate American voters’ concerns.
The US government is not the only organization trying to deal with China, which is still the world’s key producer of so many things, including the iPhone. CNN’s Rishi Iyengar wrote the obligatory feature about large multinational corporations – in this case Apple – having difficulty leaving China.

Iyengar pointed to Apple CEO Tim Cook’s warning that continued supply chain bottlenecks caused by China’s continued strict measures to curb the spread of Covid-19 could cost Apple $8 billion in the next quarter.

“There is no doubt that tech manufacturing wants to get out of China. They cannot afford the risk of constant supply disruptions and want to better control their ability to serve customers.” — Lisa Anderson, CEO of supply chain company LMA. Consulting Group,” Iyengar said. “With that said, the scale of China will not be easy to replicate, so the transition will take time and investment.”

A major escalation over Taiwan would bring both economic and diplomatic issues together and could undermine the global economy as much, if not more, than Russia’s war with Ukraine.

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