U.S. moves to cut Huawei off from global suppliers

Reemerging signs of strained relations between the U.S. and China have become more visible as the Trump administration barred Huawei from receiving shipments of technological materials from global chipmakers on Friday. The Final Round panel breaks down the latest news on the rising tensions.

Video Transcript

JEN ROGERS: [INAUDIBLE] flare-up and US China tensions that seems to be coming again today. How big do you think this flare-up is, having to do with getting, , basically, designed to disrupt Huawei's access to chips? How much attention should we be paying to this?

- Well, you could argue that some of this was largely expected. We have been hearing the rumors of the Commerce Department acting on this for a while. And you know, how big is it? I mean, this is still in the context of US-China trade. This is something that the Commerce Department has been looking at and looked at before the coronavirus. So I'm not sure we look at this as a significant escalation that wasn't expected.

Now, having said that, I do think we need to look at what the president has said as it relates to the virus itself. He's talked about potentially additional sanctions that could be coming against China, if they don't open things up for investigation on where exactly the virus originated, how it originated? He's talked about additional tariffs, as well. So those are the things, I think, that could really escalate it to a level we hadn't seen during the trade war.

Now, one thing I think to keep in mind in all this is that yesterday, we were talking about TSMC opening this new factory over in Arizona. They would certainly be hit by this Commerce Department action, because they do, in fact, sell to Huawei, and they do use US parts, as well as machinery. And so that's, to me, suggests that the move over in Arizona if, in fact, it does all go through, is also a pretty significant one for TSMC in trying to woo the administration to back down on some of this pressure, essentially saying, we're going to build a factory. We're going to give you a public relations win. And you know, let's talk about trying to pull back on some of that pressure from these foreign semiconductor makers, which I simply don't see happening anytime soon, especially given the election year.

RICK NEWMAN: This new tension between the United States and China-- or I guess I should say renewed tension-- this is not accidental or incidental. There's a really important political element to this, which is this is part of Trump's campaign strategy. He can no longer run on a strong economy. That was plan A. So now he's trying to figure out, what does he run on now? And one of the two or three prongs is vilify China. That's one way of saying the coronavirus wasn't my fault. It came from China; and also, deflecting from all the criticism of Trump's own very slow response to the virus crisis, which continues to this day. So that-- I mean, as long as that remains Trump's political strategy, that's going to continue and perhaps intensify all the way into November.

JEN ROGERS: You know, sometimes we forget that it is an election year. It's 2020, and the election is going to be here before we know it in-- in some cases. [INAUDIBLE]

RICK NEWMAN: [INAUDIBLE] Jen. I'm here to remind you.

JEN ROGERS: Sorry, Rick, what did you say?

RICK NEWMAN: I never forget it's an election year. I'm here to remind you.

JEN ROGERS: Thank you. Rick Newman is here to bring us down and remind us it's an election year. Fantastic.