Is America losing the tech war to China?

David Goldman (Spengler) writes in PJ Media,

As things stand, America is likely to lose the tech war with China. The stock market should be sending a message to President Trump. U.S. semiconductor stocks are down 20% in the past month, and the broad market has been in freefall for a week. This is a war we can win, by mobilizing American ingenuity to produce technology that will crush the competition. No-one ever won a war by trying to stop someone else from doing something. I'm an Always Trumper, and I want the president to win another term. But he's risking the U.S. economy and his re-election chances on a poorly-conceived offensive.

...We might slow Huawei down by banning exports of U.S. technology--although I doubt we will slow it very much--but we can't stop China from becoming the world's dominant producer of high-tech products unless we rebuild our own high-tech industry.

...Just why has the trade war morphed into a tech war?

...Telecom hardwire providers serve their national intelligence agencies. It would be naive to imagine that China's giant Huawei Technologies, the world's largest provider of telecom equipment, doesn't have ties to its country's intelligence service, as American officials allege. I'm sure of this, because that's exactly what our National Security Agency did with Cisco, formerly America's premier supplier of Internet routers and related equipment. The NSA installed "back doors" in Cisco equipment according to documents leaked to the public by renegade NSA consultant Edward Snowden. Yes, the NSA knows where your phone is, even when it's turned off, and when it's turned on, it can listen to your conversations. Whether it actually does or not is a matter of conjecture.

Much as I fear abuse of power by U.S. intelligence, and suspect "deep state" participation in an attempted coup against President Trump, I want the United States to maintain its advantage in electronic eavesdropping. The problem is that we don't produce any telecom hardware. Zilch. We used to. Cisco was the market leader, but has pretty much abandoned the hardware business (it makes more money in software).

The U.S. economic expansion is at risk. In April the purchasing managers' surveys produced by the research organization Markit fell off a cliff. At barely above the 50 mark, they show that almost as many businesses were contracting as were growing. The trade war is partly to blame: Businesses have postponed capital investment until the shape of global supply chains is clear. The Atlanta Fed is now projecting 2nd-quarter growth at just 1.3%, and JP Morgan is predicting 1%. That's a big drop from the preliminary 3.2% number for the 1st quarter (and that was probably inflated by fluff). Bond yields are in free fall, at their lowest level in 17 months, as investors anticipate economic weakness.

...We've licked this problem before, when John F. Kennedy set the Apollo moonshot in motion and Reagan led a massive, tech-intensive defense buildup. We can do it again. But what we are doing now will sooner or later be a losing strategy.

Read more here.