IWSF – Ch 273

The entire United States was engulfed in shock, and investigations were launched simultaneously at organizations related to the defense industry, including NASA, Boeing, and Lockheed Martin.

The Bureau of Industry and Security (BIS), under the U.S. Department of Commerce, immediately suspended all sales of smartphones, communication equipment, and electronic products from companies such as Weihua, TZE, Ovo, and Bifo.

Shelves stocked with Chinese products disappeared from offline stores across the U.S., and online shopping malls removed their sales pages.

The CIA launched raids on Supernano distribution networks within the United States and sent official requests for cooperation to China.

Supernano stated that they had not inserted the chip and that its purpose was unclear, but no one believed them.

Other countries using Supernano servers also began inspections simultaneously, and the controversy surrounding spy chips from Chinese companies escalated into an international issue.

The South Korean government also launched investigations into the Financial Supervisory Service and the Korea Exchange, which use Supernano servers.

While information leaks are problematic, the potential paralysis of the financial transaction network due to a cyberattack is a critical concern.

U.S. media outlets continued daily reports highlighting issues of patent infringement and technology theft by China.

U.S. netizens were in an uproar.

– Have the Chinese been stealing our information all along?

– So, is it true that Zhou Auto copied CarOS’s technology?

– What haven’t they copied?

– China is making a fool of America.

– Let’s not use Chinese products!

– This can’t continue. China must be regulated.

– What have politicians been doing until it got this bad?

– President Ronald is the only one we can trust!

– Support President Ronald!

Ronald issued a stern warning to China. “China has enriched itself by stealing our information and technology. How long must we endure this? We don’t need to buy goods from a country that treats America like a fool. We will thoroughly investigate this matter, hold them accountable, and extract reparations! If China does not cooperate, Chinese products will not set foot in America!”

On this issue, Republicans and Democrats were united in their opinion.

China completely denied the findings of the U.S. investigation and declared that it would not cooperate with any investigation. In reality, the U.S. proposal was unacceptable from China’s perspective.

Undergoing investigation would mean U.S. law enforcement agencies scrutinizing the core technologies of Chinese companies. This is problematic enough, but if it were revealed that the Chinese government was behind the technology theft, they would face international condemnation.

Minister of Commerce Li Xuewei addressed the media, stating, “The Chinese government and businesses have never infringed on the intellectual property rights of foreign companies. There were no issues with Supernano’s production process either, and authorities are also investigating how the spy chip was inserted. Imposing tariffs on Chinese products based on unconfirmed facts is a clear violation of WTO regulations. If the U.S. proceeds with this, China will have no choice but to retaliate to safeguard its core national interests.”

While China strongly asserted its position against U.S. pressure, it made maximum efforts behind the scenes to reach a compromise.

As evidence of this, they suddenly began reviewing plans to increase imports of U.S. shale gas and agricultural products.

Experts also predicted that since a trade war would harm both countries, a compromise would be reached at a reasonable level rather than escalating to an extreme situation.

However, this was said by people who did not know Ronald Stamper well.

[(Breaking News) U.S. Imposes 25% Additional Tariffs on Over 900 Items Worth $50 Billion in Imports!]

[(Urgent) U.S.-China Trade War Begins!]

[What Will China’s Response Be?]

[Will China Cooperate with the U.S. Investigation?]

[Will Protectionism Intensify in the Global Economy?]

The world was taken aback when the unlikely scenario became reality.

China hastily launched a counterattack, imposing identical tariffs on $50 billion worth of U.S. imports.

“If the U.S. imposes tariffs, we have no choice but to impose tariffs as well. This is a matter of survival for China.”

Ronald scoffed. “China is blaming the U.S. instead of admitting its mistake. Now, China will pay the price for underestimating America.”

Just two days after China imposed tariffs, Ronald additionally imposed tariffs on another $200 billion worth of Chinese imports.

“This is not the end, but merely a preview. If China continues to refuse to cooperate with the investigation, I will impose tariffs on the remaining $250 billion as well.”

This effectively meant imposing tariffs on all Chinese products. He even declared that he would increase the additional tariff rate to 50 percent.

This would cause Chinese products to lose their price competitiveness.

Of course, the U.S. was not immune to the damage either. As tariffs caused the prices of Chinese manufactured goods to soar, inflation was inevitable.

However, Ronald’s attitude was indifferent. With the economy booming and workers’ incomes rising, a slight increase in inflation was considered manageable.

“The Chinese government will defend its national interests!”

China, like the U.S., retaliated with additional tariffs, primarily targeting soybeans and corn.

This was a direct attack on the Farm Belt, an agricultural region considered a core support base for Ronald, along with the Rust Belt.

Ronald canceled his other engagements and immediately flew to North Dakota. More than half of the soybean production from this state is exported to China.

“China is attacking American farmers with underhanded tactics. It’s because they know you are strong supporters of mine. But don’t worry. If we just hold on a little longer, we will prevail.”

He then prepared a $15 billion emergency relief package to appease the farmers.

The damage to U.S. farmers, in turn, harmed ordinary Chinese citizens.

Soybeans and corn are used as livestock feed and raw materials for soybean oil. As soybean prices skyrocketed due to the tariffs, pork and soybean oil prices increased.

Pork and soybean oil are essential in Chinese cuisine. However, as imports of U.S. products decreased and prices surged, food prices in China skyrocketed.

As the two superpowers opened fire and exchanged volleys, other countries and businesses anxiously wondered if they would be caught in the crossfire.

Regarding the concerns of other nations, Ronald stated unequivocally, “The target of America’s trade war is solely China!”

He also announced that he would increase imports from Asia and Europe. Consequently, other countries adopted a wait-and-see approach, observing the situation unfold.

Since the entire world is interconnected in a single economic sphere, a trade war would harm everyone. However, it was clear which side would suffer greater losses.

Most experts analyzed that China would suffer significantly more damage than the U.S.

This is because China’s exports to the U.S. are more than double the U.S.’s exports to China. Furthermore, the U.S. not only imposed tariffs but also initiated comprehensive sanctions against China’s high-tech industries.

Export bans on production equipment, restrictions on technology transfer, rejection of mergers and acquisitions approvals, and so on.

Consequently, all of China’s ongoing semiconductor investment plans were stalled, and the mergers and acquisitions of U.S. startups by companies like Weihua, TZE, and Xiaomi were also completely halted.

Minister of Commerce Li Xuewei reacted with outrage. “Are you saying China is forbidden from developing technology? Should poor countries remain poor forever?”

President Zhang Pinghua appealed to the international community. “The world has enjoyed peace and prosperity through free trade. A trade war will only inflict losses and wounds on all sides. It must be stopped immediately.”

It’s ironic to think about it.

Originally, the U.S. had emphasized free trade, advocating neoliberalism and globalization, while China had grown through protectionist trade policies.

But now, they were switching positions and making opposing arguments.

Most of the international community was incredulous, questioning whether China was in any position to say such things. After all, wasn’t China the very nation that had consistently resorted to trade retaliation whenever political or military issues arose?

When the Senkaku Islands dispute with Japan occurred, they banned rare earth exports; when Chinese dissident Liu Xiaobo received the Nobel Peace Prize, they reduced imports of Norwegian salmon in protest; and when a dispute arose with the Philippines, they tightened quarantine inspections on Philippine bananas and fruits.

To such an extent that research even indicated that if a country’s leader met with the Dalai Lama, that country’s exports to China would decrease.

It was a petty and underhanded tactic, hardly befitting a major power. For the countries on the receiving end, there was no effective way to respond.

But now that they were facing trade retaliation themselves, they were suddenly posturing as champions of free trade!

Countries that had been subjected to trade retaliation, particularly South Korea, which had recently been on the receiving end, reacted with incredulity.

– Weren’t they just bullying Korea? Now that they’re getting hit by the U.S., suddenly they’re playing the victim?

– Continental double standards?

– But what nonsense is Li Xuewei spouting? It’s not about stopping technology development, but about stopping the copying. Can’t they develop technology without copying?

– Even China is helpless when facing a beatdown from the U.S.

– Go get ’em, Ronald! You’re doing great.

– China is in chaos right now. Prices are soaring, the yuan is plummeting. Is the real estate bubble next to burst?

– Let’s boycott Chinese products. That’s why I use Nphone and not Chinese smartphones, no matter how cheap they are.

– Yeah, that’s Chinese-made. Don’t you know Nphone is manufactured in China?

– And stop exporting fine dust, you bastards!

– ㅋㅋ But if you think about it, didn’t this all start with Kang Jin-hoo?

– They stole CarOS’s technology and now the whole country is getting screwed over.

– Kang Jin-hoo’s little snowball effect ㅋㅋㅋㅋ

– China is totally screwed because of Kang Jin-hoo..

-If I were Zhang Pinghua, I’d want to kill Kang Jin-hoo ^^

-Right? Why did they mess with Kang Jin-hoo?

– Ah! This is freaking exciting. Super entertaining.

To reporters’ questions about how long the trade war would continue, Ronald replied, “There’s a very simple way to end this game: China just needs to accept America’s demands. But why won’t China do this simple thing? Why?”

The trade war between the two hegemonic powers was defined by a single word: ‘game.’ And Ronald was a gambler who had never lost a game.

Amid the escalating trade war, Chairman Im Jin-yong flew to the United States.

He remarked with amusement, “You really landed a solid blow. How did you find it?”

“We got lucky. More importantly, how’s the situation at Seosung Electronics?”

“For now, China’s retaliatory measures have been suspended.”

While there was no official announcement, China subtly lifted sanctions against Seosung Electronics and Eunsung Motors.

In a situation where they were losing ground in the dispute with the U.S. and appealing to the international community to halt trade retaliation, it would have been difficult to maintain sanctions against companies from a specific country.

Thanks to the brand recognition gained during the Big One event, Seosung Electronics was competing with Nphone in the premium smartphone market. However, they were losing ground to Chinese companies in the mid-to-low-end market, resulting in a decline in overall market share.

However, this incident led to the suspension of Chinese smartphone sales and boycotts, providing them with a relative windfall of benefits.

Conversely, Chinese IT companies became targets of sanctions worldwide.

In the U.S., sales of almost all products, including smartphones, TVs, laptops, and computers, were suspended. European countries also restricted the sale of Chinese electronic equipment pending the investigation results on the spy chips.

Taekgyu said, “But in the midst of all this, why is CL Telecom saying they will proceed with the planned introduction of Weihua’s communication equipment?”

“Well, I guess they offered a cheap price.”

For context, Weihua is an IT company founded by Jin Zhirong, a former officer of the People’s Liberation Army. It has experienced rapid growth in the wireless communication equipment sector, backed by strong support from the Chinese government. They later ventured into smartphone manufacturing and are currently ranked second in global market share, after Seosung Electronics.

However, Weihua has been implicated in several backdoor and patent infringement issues. They pre-install apps on smartphones capable of stealing information, access competitors’ servers to extract data, and provide hacking tools to the People’s Liberation Army’s cyber warfare units.

Furthermore, unusually for China’s largest IT company, it remains unlisted (and reportedly has no plans to go public), and its ownership structure is unconfirmed. In fact, the general consensus was that it is effectively a Chinese state-owned enterprise.

In any case, while most countries were blocking the adoption of Weihua’s communication equipment, CL Telecom was the only one that decided to proceed with its planned adoption.

Taekgyu muttered with his arms crossed, “Should we call this ‘backdoor gulg-gi’?”

Chairman Im Jin-yong chuckled and said, “South Korea is an export-driven nation, and China and the U.S. are its first and second largest trading partners, respectively. Like the saying, ‘when whales fight, the shrimp’s back is broken,’ a prolonged trade dispute won’t be beneficial for South Korea either.”

I nodded. “Don’t worry. It will be over soon.”