U.S. plans next trade skirmish with China

On January 22, the Trump administration slapped substantial tariffs on imported solar panels and washing machines, with China as the primary target. Likely in retaliation — though this was not made explicit — on February 5, China began investigating American exports of sorghum, a grain that is a primary ingredient for the popular Chinese liquor baijiu.

Neither move is large enough to be properly called the start of a “trade war,” but they are likely the first of several moderate actions that the two countries will take to address what both sides see as unfair bilateral trade practices.

Here’s how American businesses and politicians are deliberating the next steps in the skirmish:

• Two Republican senators want to blacklist Huawei from government contracts, further isolating the smartphone and network equipment maker that already saw a deal with AT&T fall apart a month ago under political pressure, Reuters reports.
• “Huawei is effectively an arm of the Chinese government,” Tom Cotton of Arkansas argued. The legislation he introduced together with Marco Rubio of Florida proposed blocking both Huawei and its competitor ZTE from selling or leasing equipment to the U.S. government.
• Other legislation is being softened, however, as industry lobbyists work to prevent commercial sales of too broad a definition from becoming ensnared in Committee on Foreign Investment in the United States (CFIUS) review, according to Reuters.
• Big U.S. companies worry about loss of sales if the legislation to expand CFIUS, led by John Cornyn in the Senate and Robert Pittenger in the House, does not clearly define which technologies need to be reviewed, or expands the caseload to the point that the CFIUS review is prohibitively slow.
• Meanwhile, the American aluminum foil industry awaits a final verdict from the U.S. International Trade Commission, as industry players argue that Chinese imports have decimated their business, Bloomberg says. If the commission rules in their favor, import duties on Chinese aluminum foil of up to 162 percent could become permanent.

• Private education
  Private school with global ambition to open in D.C. and China in 2019 / Washington Post
  “An education company backed by U.S. and Chinese investors is launching a global private school for students ages 3 to 18, with the first two campuses scheduled to open next year in Washington and the Chinese coastal city of Shenzhen. Whittle School & Studios will offer foreign-language immersion — Chinese in the United States, English in China — with a curriculum centered on the mastery of core academic subjects, ­student-driven projects, and off-campus learning opportunities in major world cities.”
• New drugs
  Chinese scientists discover new asthma treatment / Sixth Tone
  “Unlike its closest competitors, TSG12 can be used on its own without becoming less effective over time.”
• Drone competition
  U.S., Israeli drone makers keep wary eye on rising Chinese / Reuters
• The politics of foreign business in China
  Mercedes-Benz owner Daimler apologizes again for Instagram post quoting Dalai Lama / Shanghaiist
  Daimler new-energy vehicle investment gets green light from Beijing / Caixin
• Gray rhinos (?)
  HNA Group puts $4 billion of U.S. properties on the market / Bloomberg
• Stock markets
  Everything’s a sell in China after $660 billion equity wipeout / Bloomberg
• Digital payments and capital outflow controls
  Alipay, Tenpay fined for violations in cross-border payments / Caixin
• Evernote decides on Tencent for Chinese data hosting
  Evernote announces plans to migrate all data in China to Tencent Cloud / TechNode