The United States is poised to tighten its grip on economic interactions with China, signaling a strategic move to protect its national interests and maintain technological superiority, Steven Okun, CEO of APAC Advisors said. This development comes amid a series of legislative actions targeting Chinese-owned companies and technologies.
What Happened: The U.S. is expected to intensify its curbs on China. Okun, during an interview with CNBC, highlighted that "the decoupling is really in full force. The question is to what extent and how broad will it be."
Last week, a unanimous vote by lawmakers pushed forward a bill that could force ByteDance to sell TikTok or face a U.S. ban. House Speaker Mike Johnson (R-La.) announced that the bill would be debated on the floor come Wednesday. The Select Committee on the Chinese Communist Party issued a statement citing TikTok's ownership by ByteDance as a national security threat due to its obligations to the Chinese government.
"You prevent China from accessing the U.S. market, in particular, where the party can have some type of control, and then you build at home, as opposed to relying on China. So this is just part and parcel from a broader strategy," Okun added.
The U.S. has been steadily increasing pressure on Chinese companies, particularly in sectors like semiconductors, electric vehicles (EVs), and biotechnology. A recent Senate vote approved a bill targeting Chinese biotech firms over security concerns. Energy Secretary Jennifer Granholm expressed worries last week about China potentially dominating the U.S. EV market.
China's Foreign Minister Wang Yi criticized the U.S. for inventing new methods to suppress China, arguing that the U.S. is trying to monopolize the high end of the value chain. The U.S. had previously implemented rules to prevent China from accessing advanced semiconductor technology, citing military concerns.
Why It Matters: The escalating tensions between the U.S. and China over economic and technological dominance are not new. The potential ban or forced sale of TikTok by its Chinese parent company, ByteDance, is a part of a broader strategy by the U.S. to mitigate risks associated with Chinese technology on American soil. TikTok was mapping out strategies to prevent a U.S. ban, even as President Joe Biden indicated his readiness to sign the bill.
Earlier, former President Donald Trump expressed opposition to the TikTok ban, suggesting it would unfairly benefit Meta (NASDAQ: META) and its CEO, Mark Zuckerberg. Trump's stance underscores the complex web of interests that influence the debate over the security and economic implications of foreign technology in the U.S.