“Cooperation between states should not be conducted against or to the detriment of the interest of third parties,” China’s foreign ministry told the Financial Times in an article published May 13. Beijing maintains that this is a “basic principle.”
Chinese officials complained about the national security provisions in the general terms for the U.S.-United Kingdom Economic Prosperity Deal, announced May 8. The deal was the first trade agreement touted by the Trump administration, which imposed tariffs on most of the world on Apr. 2, which President Trump dubbed “Liberation Day.”
In practical terms, Washington and London agreed that only goods meeting American security requirements will be eligible for relief from U.S. tariffs.
China’s regime, by surreptitiously including suspicious components in Chinese equipment, has only itself to blame for the proposed restriction. In view of the threat that these products pose, it’s important to keep them out of the U.S., even if there were such a “basic principle,” which there isn’t.
The general terms state that the U.S. will provide “modified reciprocal tariff treatment, based on our balanced trading relationship and shared national security priorities.”
Those “priorities” include those “identified in future U.S. Section 232 investigations.”
Section 232 of the Trade Expansion Act of 1962 authorizes the president to impose restrictions, including tariffs and quotas, on imports that impair or threaten national security.
The general terms specifically refer to Section 232 investigations regarding pharmaceuticals and pharmaceutical ingredients and mention “U.S. requirements on the security of the supply chains of steel and aluminum products intended for export to the United States and on the nature of ownership of relevant production facilities.”
“China is alarmed,” trade expert Alan Tonelson told me, “because the national security provisions of President Trump’s framework deal promise to neutralize key Chinese trade weapons.”
“For the U.K. to do this, it’s not fair to China,” Zhang Yansheng of China’s Academy of Macroeconomic Research told the Financial Times. “This type of poison pill clause is actually worse than the tariffs.”
Zhang is correct. These particular poison pills will not only prevent countries from using Chinese components in products exported to the U.S., but they will also result in countries shunning products containing these components in internal markets.
China issued its complaint about the U.S.-U.K. deal at a bad time for Beijing. Just as it was complaining, Reuters reported that some Chinese-made power inverters, which connect wind turbines and solar farms to electric grids, contained unauthorized communication devices that could disable or damage the grids. The inverters can even cause blackouts.
Also, such unauthorized devices have been found in batteries sourced in China.
“Assuming effective follow-through, Chinese parts and components will be kept out of British infrastructure-related exports to America, thereby preventing Beijing from spying on or sabotaging these vital U.S. networks,” Tonelson, who blogs on the intersection of trade and geopolitics at RealityChek, pointed out.
“China is using our open markets and ‘free trade’ system to lace the technology of Western states with Trojan horse equipment,” Brandon Weichert, senior national security editor of the National Interest, told me.
“Specifically, the Chinese regime has embedded American solar power systems with an assortment of booby traps, from surveillance devices to destructive systems,” Weichert said, adding that the power inverters can damage solar farms.
The risk of Chinese control of devices is not theoretical. Reuters reported that in November, parties inside China remotely shut off solar power inverters in the U.S. and elsewhere. Moreover, Spanish authorities are now investigating whether the massive outage on April 28 was caused by a cyberattack on solar and wind farms in that country.
Inverters are not the only Chinese-made devices with unauthorized communication components. Last March, the Wall Street Journal reported that ship-to-shore cranes manufactured by Shanghai Zhenhua Heavy Industries Co., which supplied nearly 80 percent of such cranes at American ports, contained modems that were not included in customer specifications and were not supporting the operation of the equipment. The communication devices could be used to disable the cranes or even cause damage at the ports.
China, in short, appears to be planning a wholesale sabotage of American infrastructure.
Sam Faddis, a former CIA operations officer and senior editor of AND Magazine, described what happens after the Chinese “shut down the electrical grid, turn off the water, and turn off our communications.”
“You now live in the 16th century, and unless you are a real prepper, you are not prepared to make it in that world,” he wrote in April.
Expect to see national security provisions in other trade deals Washington negotiates going forward. The Trump administration now has a template, and it is not about to allow in, through other countries, what it will not take through the United Kingdom.
Gordon G. Chang is the author of “Plan Red: China’s Project to Destroy America” and “The Coming Collapse of China.”
