China’s Foreign Ministry recently emphasized to the Financial Times that cooperation between nations should not harm the interests of third parties. They described this as a “basic principle” in an article that came out on May 13th.
On May 8th, Chinese officials released general terms for a trade contract between the UK and the U.S. This was one of the initial trade agreements promoted by the Trump administration, which had imposed tariffs on numerous goods globally earlier on April 2, calling it “liberation day.”
Notably, Washington and London stipulated that only products meeting U.S. security criteria would qualify for relief from U.S. customs duties.
In response to this, the Chinese government criticized the proposed limitations, implying that certain distrustful elements could be hidden within Chinese equipment. This raises concerns about safety, making it crucial to prevent these products from entering the U.S., even with claims of “basic principles.”
The agreement specifies that the U.S. will offer “modified mutual tariff treatment” based on equal business relations and mutual national security goals.
These “goals” will be clarified in future evaluations based on U.S. Section 232 assessments.
Section 232 of the Trade Expansion Act of 1962 empowers the President to apply measures, including tariffs and quotas on imports that may threaten national security.
Terms also detail investigations regarding drug supply chains and highlight requirements pertaining to the security of steel and aluminum supplies intended for U.S. export, as well as the ownership of associated production facilities.
Trade analyst Alan Tornelson remarked that China is now alert, given that the national security clause could undermine China’s key trade advantages.
Zhang Yansheng from China’s Academy of Macroeconomic Research expressed to the Financial Times that he finds it unjust for the UK to favor the U.S. in this way, describing this clause as more damaging than tariffs.
Zhang’s view seems valid; such restrictions not only block the use of Chinese components in U.S.-bound exports but also limit their presence in domestic markets.
China lodged a complaint against the U.S.-UK deal at a particularly troubling moment. An issue arose when a Chinese power inverter—used to connect wind turbines to the electric grid—was found to have unauthorized communication devices, posing risks to grid integrity. Such inverters have the capability of causing widespread power cuts.
Moreover, unauthorized devices have been identified in batteries manufactured in China.
Experts noted that, assuming effective implementation, Chinese components would likely be barred from UK exports to the U.S., effectively reducing potential espionage risks targeting crucial U.S. systems.
Brandon Weicelt, a senior national security editor, pointed out that China appears to be racing towards embedding surveillance measures in American solar systems, potentially incorporating harmful elements that could disrupt their functionality.
Risks associated with Chinese technology aren’t just hypothetical. Reports surfaced that Chinese actors had remotely disabled solar inverters in the U.S. and elsewhere last November. Additionally, Spanish officials are investigating whether a significant outage in April was linked to cyber threats against solar and wind infrastructures.
Chinese-made devices, unfortunately, have been found with rogue communication components before. In March, for example, it was reported that cranes manufactured by a Chinese company included unauthorized modems which weren’t included in specified customer requirements and had no legitimate role in crane operations. These could potentially cause major disruptions at ports.
Essentially, there seems to be a strategy in place from China to impede U.S. infrastructure.
Sam Fadis, a former CIA officer, commented on the potential fallout, suggesting that a severe shutdown could plunge life back into a much more primitive state without appropriate preparations.
Looking ahead, there is hope that national security elements will feature prominently in future trade negotiations, as the Trump administration now appears to have set a precedent that may affect dealings beyond just the UK.
