Analyst says U.S.-China tech tensions will not stop even if Biden wins

The tech tensions between the U.S. and China continues to grow as both nations battle for the monopoly of the global tech space. This year has been intense for tech companies in the U.S. and China as the U.S. government increasingly targets Chinese tech companies including Huawei and TikTok.

According to chief economist and managing director at DBS Group Research Taimur Baig, tensions between the two countries will continue whether or not Democratic presidential nominee Joe Biden wins the November election.

“Imagine a scenario where Biden becomes president, I don’t think on technology issues… (they) are going to go away in any meaningful manner,” Baig said. “It may be less volatile, it may be more rules based, but the tensions will remain.”

The tensions between the two economic giants worsened this year as Washington steadily targeted Chinese tech giants. The Trump administration said for national security certain Chinese tech companies would not be allowed to continue operating in the United States as they claim those companies could collect user data of Americans and deliver them to Beijing. A claim both Chinese tech firms have denied.

In August, President Trump banned Tencent and ByteDance from having any transactions in the U.S. Tencent is the parent company of popular Chinese messaging app WeChat, while ByteDance owns short-video app TikTok.

Last week, the U.S. reportedly imposed restrictions on exports to SMIC, China’s biggest chipmaker. According to the U.S. Commerce Department, the equipment supplied to the company could be used for military purposes.

“So I don’t think the U.S. elections outcome per se makes things infinitely better for China. It probably makes it a little less volatile,” Baig told CNBC on Monday.

The U.S.-China tensions first worsened in 2018 after Trump imposed billions of dollars worth of tariffs on Chinese goods. The Chinese government reacted by imposing the same measures on American businesses, which officially launched a trade war between Washington and Beijing.

“On one hand, you could argue that the trade tensions forced China to increase investments in domestic homegrown technology, and it acts as a booster shot, if you will, inadvertently by Trump … by pushing China into a corner (and) forces China towards what they call self-sufficiency. So I don’t think that hurts China in the near term,” Baig said.

Biden may have slammed the U.S.-China trade war, however, he still supports the U.S. to “get tough on China.” On the other hand, Republicans continue to embrace President Trump’s “American First” agenda which neglects unfettered trade.

“Now, I think the U.S. can very legitimately, whether Biden or Trump say they don’t want China’s military to have access to any U.S.-made tech hardware, but that still leaves out large swathes of consumer devices that also use chips, and for that, it will be very hard to make a national security argument,” Baig added.