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1. A thread on why Trump decision to put Huawei on the entity list is a very big deal indeed, as @Dimi and others are arguing. ft.com/content/c8d6ca… . This is a far bigger step than just excluding Huawei from the US market.
2. It requires any US company that wants to supply Huawei to first ask the US government for permission. This has obvious implications for Google's Android operating system, Qualcomm chips and a myriad of other suppliers
3. Dennis Wilder says that this is the "beginning of decoupling" in the telecommunications sector. It's the clearest sign yet that the basic assumptions of globalization are collapsing. As @ANewman_forward and I argue, interdependence is being weaponized dropbox.com/s/27mnqcxrxwap…
4. The globalization of the 1990s massively transformed the world economy. National economic systems that had previously been separate from each other became densely interpenetrated, and deeply dependent on financial, informational and trade networks that spanned borders.
5. These networks are structurally embedded. Supply chains have been globalized, in the pursuit of economic efficiencies. It's hard to imagine how the world economy could work without them. But the pursuit of efficiency created strategic vulnerabilities.
6. Some networks had hub structures meaning that states that could control te hub could control the network. Others relied on crucial components that were single sourced or sourced within an individual country.
7. The last decade has seen states move increasingly to exploit these vulnerabilities against others or to shore their own vulnerabilities up against outside attackers. That's the story of the use of SWIFT against Iran, and increasingly it's the story of fights over tech/networks
8. A world of networks built around the pursuit of economic efficiencies is becoming a world where these networks are being exploited (or at risk of being exploited) for strategic advantage. nationalinterest.org/feature/americ…
9. The Huawei move displays both US fears about vulnerabilities, and US efforts to exploit them. The US is worried that 5G networks could compromise US communications to surveillance. US is not only moving to push Huawei out of existing markets - but to damage Huawei's core
10. business by potentially preventing it from using core US components (such as Qualcomm chips or Android OS (it remains to be seen exactly which technologies will be listed). Chinese hawks are talking about retaliating through e.g. blocking sales of rare earths again.
11. This will also reinforce Chinese efforts to build "autonomous and controllable" technology and supply chains outside US control to decrease their vulnerability to future attack.
12. The old model of globalization is in serious trouble. The networks that tie the world economy together are being exploited for strategic gain. The US move is both a response to fears about its own vulnerabilities, and an effort to exploit China's vulnerabilities in return.
13. The result will likely be escalation - but we don't know for sure. We still don't have anything that approaches a strategic analysis of this new field of politics and how it works. Historical experience provides no good recent analogies.
14. During the Cold War, the US dominated parts of the global economy and Comecon were largely disconnected, with the exception of raw commodities such as grain. Now, the economies of US, Europe, China and Russia are deeply intertwined.
15. If you want to be pessimistic, you can resort to scorpions-in-bottles analogies. If you want to be optimistic, you can point to continued shared interests that states have in avoiding major economic disruptions. The willingness of the US to push this so far and so hard
16. suggests the skeptics may find their fears justified - but we'll be finding out. Interesting times for international political economy scholars, if frightening times for the international political economy. Finis.
