Shadow Protectionism: The US Government vs. Chinese Phone Makers

English: Company ZTE in the Shenzhen High-Tech...
English: Company ZTE in the Shenzhen High-Tech Industrial Park (Photo credit: Wikipedia)

In February, US intelligence community leaders told the US Senate’s Intelligence Committee that Chinese phone manufacturers Huawei and ZTE represent a national security threat. FBI director Christopher Wray warned of the Chinese government finding ways to “maliciously modify or steal information” and “conduct undetected espionage” through these inexpensive consumer products.

In March, Federal Communications Commission chair Ajit Pai proposed a new rule forbidding use of the two companies’ equipment in phone and Internet access projects financed through the commission’s Universal Service Fund, pointing to similar national security concerns.

On April 16, the US Department of Commerce banned American firms from selling vital components to ZTE for seven years, citing the company’s violations of trade sanctions on Iran and North Korea. Or, to put it a different way, citing national security.

Are cheap Chinese phones and Internet routers really a significant threat to national security? Probably not. The more likely motive behind these moves is the inclination of US president Donald Trump, and his administration, toward “economic nationalism” in the form of protectionist trade policies directed with particular venom toward China.

Simply put, the Trump administration would rather see Americans buying phones made by American companies (e.g. Apple and BLU) or at least by companies in countries more closely tied to the US (e.g. Samsung and LG in South Korea, Sony in Japan, and HTC in Taiwan) than phones made by Chinese companies.

In other areas, Trump’s protectionism has been more overt, as with  his tariffs on steel and aluminum. Why this different, under-handed approach with phones? Because it’s hard to put an “America First” spin on phone protectionism.

For one thing, he knows Americans are going to buy foreign phones.  Apple’s price point is a bit high for most, and BLU has recent consumer confidence problems over Chinese malware (sort of inconvenient to the “national security” story, huh?) Americans on a budget buy cheap foreign Android phones; more well-heeled buyers who prefer Android to iOS choose Samsung.

Secondly, he’d rather not have his base see as him throwing a bone to foreign phone makers (although you can bet he’ll bring it up in trade negotiations), while at the same time hitting the  bottom lines of American companies like Qualcomm, Intel and Microsoft.

This dog and pony show is less about “America First” than it is about “Get China.” It’s sure to put American firms in other market sectors on edge. Who will the next victims be and how bad the damage? The administration’s anti-China scheming is the trade equivalent of Russian roulette.

In a globalized economy, it’s impossible to hurt one country or firm without also hurting several enterprises in your own country — and your own country’s general economy. More domestic companies will be harmed than helped, and the harm will exceed the benefits.

Hiding protectionist schemes behind appeals to “national security” doesn’t reduce the damage. It merely shifts  blame and conceals motives. Every time Trump indulges his urge to “Get China,” American companies and American consumers will feel the pain.


Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism ( He lives and works in north central Florida.


Freedom is Winning in the Encryption Arms Race

Bitcoin (stock photo from, CC0 license)
Bitcoin (stock photo from, CC0 license)

At tax time in the US, as Gaurav Sangwani  of India’s Financial Express reports, many American cryptocurrency users weren’t interested in discussing that aspect of their lives with the Internal Revenue Service. In an early April TeamBlind survey of 2,600 people who earned money from crypto, 46% said they wouldn’t be reporting those earnings to Uncle Sam. Meanwhile, per Investopedia’s Nathan Reiff, fewer than 100 of Credit Karma Tax’s 250,000 most recent filers  had reported cryptocurrency transactions as of April 13.

That’s bad news for the IRS, but great news for America. People whose ancestors fought a revolution nearly 250 years ago on the slogan “no taxation without representation” are finally acquiring the weapons to fight a new revolution on a new slogan: No taxation without CONSENT.

Taxation as we know it is really nothing more than the typical mob protection racket: “Nice livelihood you got there — be a shame if anything happened to it.” And since the birth of employer “withholding” during World War Two, the mobsters have mostly had it easy. They rake what they want right off the top of your paycheck and encourage you to think of any partial refund as a gift.

The racket has always had two weak points, though.

One is that it’s dependent on a model of employment — centralized workplace, lots of employees, one employer — that’s increasingly giving way to a “gig economy” in which more and more people are becoming de facto self-employers.

The other is that it’s dependent on an easy access to personal information that once favored the mobsters but that has likewise been breaking down since the dawn of widely available Internet access.

Since the late 1980s, Americans have been engaged in an arms race with the federal government: Our strong encryption versus their attempts to compromise that encryption. Win some, lose some, but cryptocurrency is potentially our side’s decisive super-weapon.

If you thought the perpetual whining from law enforcement about encryption was about fighting terrorism, think again. It’s mostly about the money. Like other mobsters, politicians and their accomplices hate the idea of their rackets coming to an end.

Government will get much smaller and much less powerful once it has to ask nicely for a share of the wealth you produce, and justify the request, instead of just taking what it wants. That day draws closer as the percentage of people using cryptocurrency and declining to tell Uncle Sam about it grows.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism ( He lives and works in north central Florida.


Trump Isn’t the First War Criminal President. He Should be the Last.

Nuremberg Trials at courtroom 600, November 1945
Nuremberg Trials at courtroom 600, November 1945 (Photo credit: Wikipedia)

Only a couple of weeks ago, US president Donald Trump stated his desire to bring American troops home from Syria: “We’ll be coming out of Syria, like, very soon …. Let the other people take care of it now.”

As if on cue: An alleged chemical attack in Douma, where the Assad regime’s forces are rooting out rebel resistance in their re-taking of the eastern Ghouta region.

Investigators from the Organisation for the Prohibition of Chemical weapons are only now arriving to look into the claim, but Trump (as well as the UK’s Theresa May and France’s Emmanuel Macron) wasted no time proclaiming the allegations proven and Assad the culprit. On April 14, the three governments launched missile strikes on supposed Syrian chemical facilities.

The strikes were illegal under both US and international law. Congress hasn’t declared war on Syria. Congress hasn’t even passed an extra-constitutional “Authorization for the Use of Military Force” regarding Syria. Nor has the United Nations authorized military action versus Syria.

The strikes on Syria constitute war of aggression. The Syrian regime has never attacked, nor threatened to attack, any of the three countries which just attacked it, nor are its alleged domestic crimes, however horrible, the bailiwick of those three governments.

And as the Nuremberg Tribunal noted, “To initiate a war of aggression … is not only an international crime; it is the supreme international crime differing only from other war crimes in that it contains within itself the accumulated evil of the whole.”

Donald Trump, Theresa May, and Emmanuel Macron are war criminals.

They’re certainly not the first war criminals to hold positions of power in their countries. Every living former US president with the possible — possible — exception of Jimmy Carter has a lot to answer for, as do Tony Blair, Nicolas Sarkozy, et al.

Not the first by any means. But there’s no good reason why they shouldn’t be the last.

In the US, at least, Congress has the power of impeachment, and reason to use it. An increasingly imperial presidency has, since the end of World War Two, eaten away at its constitutionally vested war powers. Congress should finally re-assert its power in that sphere by removing an offending president. In fact, it should have done so long before Trump took office. He just happens to be the current perpetrator.

Beyond impeachment, it’s time to reconstitute something like the Nuremberg Tribunal and give it teeth. I personally oppose the death penalty, but if it is a deterrent to retail murder, presumably it would also deter mass murder in the form of wars of aggression.

These people won’t stop committing these crimes on their own. They must be stopped. And there’s no time like the present.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism ( He lives and works in north central Florida.