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22 May, 2019 09:53

‘Stupid economics’: Attack on Huawei tells world to avoid doing business with US - Prof. Wolff

‘Stupid economics’: Attack on Huawei tells world to avoid doing business with US - Prof. Wolff

The US has underestimated the consequences of the attack on Chinese telecom giant Huawei as it sends a strong signal for the rest of the world to avoid dealing with such an unstable partner, professor Richard Wolff believes.

The trade war with China has already evolved into a technological one as Washington barred American companies from supplying Huawei with components or technology. The move will eventually deprive the Chinese corporation of access to Google’s apps and services as well as Intel and Qualcomm chips when the measure fully comes into force.

“This is going to hurt the American economy for years to come in countless ways, it will leave an economic scar on the American economy and there is… a stunning example of stupid economics,” professor emeritus of economics at the University of Massachusetts, Richard Wolff, stressed in an interview to RT.

He explained that the way the Trump administration is “hurting” Huawei may apply to many others. Now, CEOs realize that interactions with US firms may become unsafe and put companies in a vulnerable position. Thus doing business with the US can result in damages for companies, who can “be destroyed by a political operation” as the Huawei case shows.

“Here is the terrible, terrible miscalculation of the United States, which is very similar to the miscalculation of this tariff war. You’re teaching the rest of the world not to trust doing business with the United States,” Wolff said.

“Every CEO of every company has this morning sent a memo to the vice president, saying ‘reduce our interactions with United States companies, it is not safe for us.’ We become vulnerable.”

Trump’s decision also hurts US companies as they are forbidden from operating “in the normal way – to find the best quality at the lowest price.” The analyst stressed that no other political leader in Europe or Latin America has done such a “public attack” on their own businesses.

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