“Sensational news” spread around almost all world agencies: Donald Trump thought about the consequences of a trade war with China after a conversation with the head of Apple Inc. Tim Cook The meeting itself took place on August 16 at the golf club. And last Sunday, the owner of the White House confirmed the fact of the conversation. He also said that Cook was able to “make very good arguments” in favor of the fact that the new tariffs on Chinese goods could hurt the apple business.
The fact is that import tariffs will fall on the hearts of many iPhone connoisseurs, as well as other products of the company, some of them - AirPods, Apple Watch and HomePod - from September 1, 2019. Before the MacBook and "apple" smartphones, it will reach in December. At the same time, Apple Inc.’s main competitor - Samsung Electronics - will not experience such difficulties: Seoul and Washington concluded a trade agreement last September.
Correspondents, of course, were interested in the question, what next? How will the Human Tariff (as the American leader is often called now) deal with this situation? The Reuters agency cites the president’s rather evasive response: "I will think about it."
The news received such wide coverage for two reasons. Firstly, it falls under the popular trade war tag. Mainstream media do not miss a single day in order not to criticize the White House owner for his tariff policy and trade and technological confrontation with China (as well as with Japan, the EU and many other countries). Secondly, we are talking about the cult products of Apple. In the pre-Trump era, it was the iPhone, MacBook and smart watches with apple markings that were a symbol of high technology, or, as we said until recently, innovation. Moreover, American innovations. It turns out that holy Donald swung!
If we look at this collision on the basis of the neoliberal economic model, then the “impossible Trump” and the national populists, who rely on protectionism, new industrialization and technological sovereignty, are guilty of it. All you need to solve a problem that has arisen before Apple Inc. and fans of its products - this is to reset customs duties, return to the principles of "free trade" and continue business as usual. It would be very good, in addition, to expel Donald from the White House and prohibit “all kinds of” populists and Eurosceptics around the world.
However, the electoral events of 2016-2018, which panicked the ranks of the world liberal elite, did not occur at the evil will of specific politicians. Changes in the financial and economic course in the leading economies of the West (as well as India, Latin America and, partly, Asia) were demanded by voters, who had “free trade” and open borders deprived of jobs, a familiar way of life, and hope for a better future. But most importantly: within the framework of the globalist model, humanity cannot move on to the next technological mode and begin to explore new spaces - from the Arctic to near space.
One can argue for a long time whether it is possible, in principle, to solve the problem of industrial and technological progress by forces, in the words of the classic, "a single human hostel." But in practice, by the middle of the second decade of the XXI century, it turned out that the global authorities simply could not cope with this task.
The business model of transnational corporations (TNCs) is perfectly adapted to reduce costs, optimize logistics and refine existing technologies, but it does not imply the introduction of fundamentally new technologies.
Those simply do not fit into it and even pose a danger to its dominance. TNCs achieve competitive advantage by producing goods in one place, selling them in another, paying taxes in the third, and storing revenue in the fourth. In this scheme, there is no place for genuine innovation - only for tuning and marketing. The global financial oligarchy is not going to invest in a technological breakthrough. Her trading of derivatives and managing emissions bring much more money, and most importantly - the authorities.
But as soon as there was a race for new technologies and development spaces, conflicts began to arise along the familiar old borders - the borders of national states and the contours of their zones of influence. This does not mean that international cooperation and trade are, in principle, absent. But every country today is for itself. In the Arctic and in high technology, the national interest is pursued first of all, and not the abstract “global development interests”.
The intricacies of the Arctic race deserve a separate analysis. As for the sphere of the latest technologies (more precisely, its small segment - computer-telecommunication equipment), there is a serious battle for the championship. Smartphones, laptops and other gadgets are just the tip of the iceberg.
Here, the fifth generation of wireless (5G) is the main bone of contention. For the dominance in this technology and for control over its standards (apparently not global, but regional - Europe, the Western Hemisphere, Asia, Russia and Oceania), an epic battle is unfolding between the Chinese IT giant Huawei and American companies. And states are actively participating in these battles. Nobody relies on the “invisible hand of the market”. After all, we are talking about serious things.
Today, many copies break around the so-called artificial intelligence. By and large, no one knows exactly what is at stake. Not because they are hiding something from the public (although, of course, this cannot be ruled out), but because this is a new area of activity. At the same time, all world political leaders and most experts agree that countries that have gained an advantage in this technological industry will claim the role of arbiters of planetary destinies in the 21st century. This topic is also too wide to cover in the framework of this article.
I only note that in 2019 no one is even thinking about creating AI within the framework of “global openness” or, as we liked to say here about five years ago, “broad international cooperation”. Maybe artificial intelligence will turn out to be zilch in the end (I, by the way, am a big AI skeptic), but the fact is important: the promising breakthrough industry has become a sphere not of “cooperation”, but of competition.
Let us return, however, to matters more understandable to us. To the smartphones we all use. To this world, in the palm of your hand, to glossy designer Internet accessories, without which the so-called modern man can no longer imagine his life. We considered them the most delicious fruit of globalization.
Yes, gadgets are only an insignificant part of what the latest technologies are capable of giving us, but even in this narrow sphere a tough confrontation has begun between national states and national manufacturers.
A modern smartphone is truly the fruit of wide international cooperation. But as soon as industrial and technological competition began to gain momentum, it turned out that this is what makes each of its manufacturers vulnerable. Chinese corporation Huawei tried to excommunicate from the Google Android operating system. In response, Celestial programmers announced their own OC Harmony, but the main problem of the eastern IT giant is that they need American (namely made in the USA) processors, mainly manufactured by Qualcomm. Samsung’s flagships are built on the same “stones”. Yes, both Chinese and Koreans are improving the performance of their own processors every month, but they are still dependent on Silicon Valley.
Therefore (not for the sake of Comrade X, but for the sake of Qualcomm), Trump repeatedly prolongs the grace period for purchases for Huawei, although if it were his will, he would have cut off Celestial access to American high-tech a long time ago. South Korea is temporarily in the most favorable position, both because it agreed to the trade deal proposed by Donald and because it produces memory modules that have been successfully working in computers and smartphones of all world brands for 20 years now. But Samsung did not have to rest on its laurels for long. If this vertically integrated semi-state corporation does not acquire its own 7-nanometer production, it will also inevitably fall under the rink of a new international technological order.
It is not only in China and the United States. How fierce is interethnic competition can be judged at least by the growing momentum of the tariff confrontation between Seoul and Tokyo. The so-called trade war is being waged not only by Washington and Beijing, but also by contenders for fourth, fifth or sixth place in the new economic and industrial-technological competition. Note that the Japanese-Korean conflict (unthinkable five years ago) arose around the conditions of mutual trade in the latest developments for the IT sphere. As we said above, everyone defends their market, their manufacturer and their engineering and technology school.
Now it’s clear why Tim Cook ran to Donald Trump for help, and he promised to think evasively. Apple Inc., this “lamp of innovation" of the global world, was extremely successful at a time when so-called broad international cooperation and competent marketing promised the greatest benefits. A “bitten apple” does not have its own production by definition - that’s how its business model was conceived. If Huawei and Samsung have their own factories, then all the iPhone and other fashionable gadgets of the brainchild of the late Steve Jobs are pure OEM production.
In fact, this is not even an American product. That is, it could be considered American, as long as the international division of labor established by the global authorities existed: ideas are produced here, and iron is produced there. But today it is one of the most vulnerable brands in the industry. It is not surprising that many characteristics of the smartphone from the “undoubted leader” are classified.
The more or less reliably known about the latest iPhone series is that the new processor is manufactured in Taiwan, and the case, power circuits, and everything else - in China. In this Tim Cook admitted!
If the most important (and expensive) components of the gadget were made in the USA or in other Western countries, it would not risk falling under import duties.
But even if Trump tariffs bypass Apple, this will not save the beloved Russian girl’s toy from double or completely disappear from the market in case of aggravation of geopolitical conflicts in the Asia-Pacific region.
This in a past life, the iPhone was "global" or "American." Under the new conditions, without any quotation marks or exaggeration, it became Chinese (especially considering that the official name of Taiwan is the Republic of China). We in Russia know well what the creation of a product is “in broad international cooperation”. Take, for example, the problems that Moscow experienced with the export of Superjet and the refinement of the MS-21 liner! These aircraft “suddenly” from Russian became American. And manufacturers have to take urgent measures to “nationalize” them.
And here is a completely fresh example. The latest domestic space telescope "Spectrum-M" was about to remain on paper due to the US refusal to supply carbon fiber materials for its production. Yes, Japanese suppliers have expressed their willingness to replace the products of their American counterparts. But what if Tokyo suddenly decides that the Russian satellite should be left on Earth? Say, under the pressure of circumstances related to the game of Washington, Tokyo and Seoul?
Yes, R&D is ours, but what is the use of it, if the purchases of materials and components that are subject to sanctions are necessary to implement the designs of the designers? In this sense, sanctions and tariffs are absolutely equivalent. If your hi-tech and your breakthrough projects depend on the supply of potential competitors, then expect trouble.
"Broad international cooperation" is a thing of the past. Because of sanctions, because of trade tariffs (which are one and the same thing), and most importantly - because of the aggravated international industrial and technological competition. And if we are not convinced by our own examples, then let's at least look at the “flagship of innovation” - the “apple” corporation, which built its entire business on the assumption that globalization is forever.
I can’t say with certainty that Trump will ultimately answer Cook's “convincing arguments”, but I suspect that he will be given grace time during which Apple Inc. It will be proposed to transfer the production of its "miracle of technology" to the United States. Or announce the closure of the business.
The author’s point of view may not coincide with the position of the publisher.