Crypto News: Supply Lines: US-China chip battles

It's pretty clear at this point that President Joe Biden is no softy when it comes to economic competition with China.

His administration has rolled out stiff export restrictions, maintained tariffs, advanced a big industrial-policy revamp and approved massive new subsidies that aim to bolster US manufacturing might.

In many ways, the scope and scale of Biden's China strategy have exceeded those of a predecessor who shook the global trading system with his two-year trade war.

Case in point: The Biden administration is now considering cutting off Huawei Technologies from all of its American suppliers, including Intel and Qualcomm. (Read more here)

Such a move would mark a fresh escalation of US national-security restrictions on the Shenzhen, China-based company, which has long been scrutinized for its ties to the Beijing government and Chinese military.

Sure, former President Donald Trump made waves when he added Huawei to the US "entity list" in 2019, but the total ban now under consideration would eliminate the company's access to vital US supplies entirely.

Finding Alternatives

Indeed, US export restrictions have already pushed Huawei — which was once one of the world's largest buyers of electronic components — to develop, research and source alternatives to the US components needed to run its devices.

For More: Made-in-India GE Jet Engines Sought in Closer US Ties

But the success of the Biden administration's Chinese containment policy hinges on convincing US allies to impose similar restrictions on their domestic companies.

That's why the US is working with the Netherlands and Japan to wall off China's access to the advanced chip-making machinery that Beijing needs to make cutting-edge semiconductors.

For more: Biden Wins Deal With Dutch, Japan on China Chip-Export Curbs

Looking ahead, all signs point to a deeper chill in the US-China technology relationship and tighter scrutiny on Beijing's ability to replicate the Western technologies that run everything from smartphones to satellites.

"Ultimately, the outcome sought is not necessarily decoupling but about political control," said Hosuk Lee-Makiyama, a director at the European Centre for International Political Economy. "Export controls provide governments with not just emergency breaks, but first-hand data on technology transfers."

—Bryce Baschuk in Geneva

Fired Up | Asia's manufacturers are improving at the start of the year as the region becomes more optimistic about how China's re-opening might help an otherwise gloomy outlook for the rest of the world. Factories in Southeast Asia ramped up production and purchasing in January as new orders piled in, data from S&P Global manufacturing purchasing managers' indexes showed Wednesday. Signs that prices are softening and supply chain disruptions are easing also lifted business confidence for factory output over the next 12 months. (Read the full story here.)

Plowing ahead | Caterpillar is optimistic about the year ahead, saying it expects sales to increase from last year with the help of favorable prices even as dealer inventories remain little changed.
Spoiled milk | The US set up a second dispute-settlement panel to resolve differences with Canada over its dairy quotas, saying Ottawa is still undermining access to its market under a trade deal between the nations.
Maritime fortunes | In Greece, a country where shipping is king, the industry's wealthiest figure is a woman.
Auto pilot | Boeing's chief executive officer says it's a matter of when — not if — self-flying planes will debut in commercial aviation.
Top spot | FedEx is rolling out a new system for evaluating its delivery contractors that rank them like Olympic medal winners, and those designated as the lowest-ranked "bronze" will be more likely to lose their service areas, according to a company memo.
Buoying growth | In Mexico, nearshoring is expected to continue providing a boost to the economy, despite some of the concerns about the decline in export growth in the short term.
Sea legs | US Navy warships have seen fewer days at sea since 2011 because vessels are breaking down more frequently than expected and taking longer to repair, even as the Pentagon struggles to catch up with China's larger fleet, data from congressional analysts shows.
Germany wafer fab | A $3 billion deal to produce chips for EVs in Saarland is a small but symbolic victory for German Chancellor Olaf Scholz.

Parcel outlook | UPS and the broader freight markets face a number of headwinds in 2023 from moderating economic activity and rising costs. Add to that a Teamsters' contract negotiation, and there's significant uncertainty about this year for UPS, according to Bloomberg Intelligence.
New legislation | House Republicans are aiming to move a supply-chain package in May, said Dusty Johnson, a co-chair of the Congressional Supply Chain Caucus.
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