Donald Trump just flashed the nuclear option to thwart China's rise as a superpower.
The White House yesterday threatened to blacklist Huawei Technologies from buying components from American suppliers.
The move could cripple China's largest technology company just as it's set to build 5G wireless networks that will form the backbone of the modern economy, connecting everything from self-driving cars to smart homes to advanced medicine.
Following through with the measure carries huge risks: Besides hurting American chip giants, it would anger U.S. friends and foes alike that are already spending billions on 5G networks. The alternatives to Huawei are often more expensive and seen as inferior.
The threat is likely to elevate fears in Beijing that Trump’s strategic goal is to contain China, sparking a possible cold war between the world’s biggest economies. The two sides are already sparring over the arrest in November of Huawai’s chief financial officer.
Some analysts suggest Trump just wants to pressure China over trade demands as talks hang by a thread. But a number of American lawmakers may also see this moment as the last chance to prevent China from eclipsing the U.S.
By Daniel Ten Kate