China-US tech tensions will escalate under Trump

Significance

The hearing was part of the United States Trade Representative (USTR) Robert Lighthizer’s investigation of China under Section 301 of the Trade Act of 1974, initiated in August. The US delegation to the WTO submitted in September a request for China to delay implementation of its Cybersecurity Law, citing its anticipated impact on cross-border technology transfers. Both of these developments reflect increasing technology trade tensions between the world’s two largest economies.

Impacts

• US allies are likely to face pressure from Washington over procurement of Chinese ICT in government facilities.
• The US government is likely to use power over contracts, regulation and informal pressure to shape tech companies’ behaviour.
• Espionage fears will drive harsher US and European scrutiny of Chinese investment in their domestic tech sectors.