Cyril Ramaphosa correct to back China in trade war with US, says SACP
Politics / 7 July 2019, 12:00pm / Siyabonga Mkhwanazi
Cape Town - President Cyril Ramaphosa’s backing of China against President Donald Trump’s trade wars with Beijing and other countries has signalled a change in the balance of forces in the ongoing spat.
Trump has for the past two years used trade wars to punish countries he disagrees with.
Late last year Huawei’s finance chief Meng Wanzhou was arrested in Canada on the orders of the US with Washington demanding her extradition.
The arrest of Wanzhou came after Trump had already imposed a series of trade tariffs on Beijing.
The US president pushed his tariffs against China to about $200billion (more than R2.8trillion) to stave off any Chinese influence on the US market.
Trump banned Huawei about two months ago accusing the company of espionage.
He also lobbied other countries in Europe and around the world not to buy Huawei equipment.
But Ramaphosa entered the fray at the G20 summit in Osaka, Japan, last week, where he backed China on the latest trade war with the US.
Ramaphosa is not the only one sharing his views on Huawei, but ANC alliance partners, the SACP said it supported China.
The SACP said Ramaphosa was correct in his backing of Beijing against Trump.
The SACP said the Trump administration had taken a stance against companies that were challenging US hegemony in various sectors of the economy.
China is now the second-largest economy in the world after overtaking Japan a few years ago.
While the US economy is valued at $21trillion, Beijing’s Gross Domestic Product is sitting at $13trillion.
But the SACP said China had a right to enter any market, and the Trump administration has been escalating the offensive against companies, like Huawei, challenging the US hegemony in certain segments of the economy.
“The blockade launched by the Trump administration on Huawei, for instance, has much wider implications and consequences, and South Africa is not an exception,” said the SACP.
It said Ramaphosa was correct that Huawei “provides a backbone to our telecommunications sector”.
Huawei is the front runner in the 5G network, said the president.
However, the ban against Huawei is not the first major stick Trump has used against China.
As recently as a few weeks ago, the US president threatened Mexico with trade tariffs if it did not stop the inflow of migrants from across its borders into the US.
This forced Mexico to send more than 6000 troops to its border with Guatemala to stop thousands of migrants, heading to the US through Mexico, to cross the border.
A senior minister in Mexico even met with other top officials in the US to assure them they will seal the border with Guatemala.
Mexico is one of the largest trading partners in that region.
Total US exports to Mexico were $242b and imports from Mexico were $314bn.
The US deficit with Mexico was $71bn. Economists and analysts had warned Trump that his trade wars would not serve any purpose, but backfire on the US.
Even his allies in Europe were left uneasy with his latest spat with Huawei.
Most of the European countries deal a lot with Huawei and Trump pushed them into a corner to find other technology partners.
But after the G20 summit, he appeared to have toned down and said Xi Jinping, the President of China, would buy a lot of US agricultural products.
This is in exchange for Trump agreeing to ease restrictions on Huawei.
But the US president insisted that he would give China a list of things they would want Beijing to buy from them.
Some economists and analysts had questioned the long-term impact of the strategy, with questions whether it would last for a long time.
The trade war with Huawei may not be over as Trump had said this was a temporary measure.
It remains to be seen for how long it will take before Trump strikes again with another trade war with China.