US President Donald Trump’s trade wars have “progressed” beyond the stage of simple tariff punches (painful though these can be) to attacks on the central nervous system of global technology trade networks — and that is going to be far more damaging to all concerned, including the US. Masahiro Kawai, the former dean of the Asian Development Bank Institute, summed up the situation rather well at the T20 think tanks summit in Tokyo last week, when he suggested that the Trump administration “seems to be trying to decouple China from global supply chains”. A “lot of Japanese companies are moving production out of China”, said Kawai, who is also director general at the Economic Research Institute for Northeast Asia in Japan. Bank of Japan governor and former Asian Development Bank president Haruhiko Kuroda also spoke of the need to survey the situation. Retreat from the concept of China as the “workshop” or assembly line of the world began when Trump was still doing real-estate deals. Japanese, US and other global manufacturers have been shifting production out of China to places like Vietnam and Bangladesh, or even back home. But Trump accelerated the process with his tariff wars, slowing the growth of world trade and economic growth in the process. As a leading economist in one multilateral economic organisation put it, “we have now moved from supply chain war version 1 to tech supply chain war version 2”. The supply chain discussion has, in fact, entered an entirely new dimension with the US decision to add China's multinational technology group Huawei and its affiliates to a list of companies that American firms cannot trade with unless they have a licence. Under this US government edict, companies can be targeted and sanctioned irrespective of location if they do business with Huawei and certain other Chinese enterprises. This move, which resembles somewhat US sanctions on Iran, has strong implications for supply chains in Asia and beyond. What it implies is that any company, wherever it is, that transacts with Huawei will probably face secondary sanctions. Sources in Korea for example, say that Korean firms such as LG Electronics, which use Huawei parts in building their 5G networks in Korea , appear to be vulnerable to such sanctions. Trade war forcing Chinese companies to rejig supply chains Malaysia is one of the few countries that has taken a stand against such bullying and Prime Minister Mahathir Mohamad suggested in Tokyo last week that the Trump administration is running scared of Huawei. The US would do better to fight competition by producing better products, he suggested. “The whole supply chain structure is in danger,” said a leading Asia economist (who wished to remain anonymous because of the “extreme sensitivity” of the subject). The economist added: “This may delight Trump but it should strike fear into the hearts of those who (unlike him) understand global trade dynamics.” Trump's weaponising of global tech production and trade, by means of sanctioning Huawei and all who seek to do business with it, could just as easily push China to weaponise the production and trade of the rare earths used in many critical electronic components. Will the US-China trade war fuel the next global financial crash? Trump may take heart, too, from the views of those such as China scholar Yuqing Xing, who fears a “serious exodus” of foreign firms from China because of tariffs. Yuan depreciation and improved efficiency “cannot offset the shock as [Chinese] products contain substantial imported parts and components”, noted Xing. What Trump has failed to realise as he basks in the absurdly simplistic notion of “easy to win” trade wars is that the lion's share of global growth since the 2008 financial crisis has been generated in or by China and by the rub-off effect this has had on developing and developed nations alike. The idea that America can remain or become “great” as all around it crumbles would be laughable if it were not tragic. Parts of corporate America and some US farmers are already becoming dismayed at the implications of Trumponomics, and US data is beginning to flash warning indications, too. Damage is already apparent at the level of trade. As the Organisation for Economic Cooperation and Development notes, growth in G20 international merchandise trade, already seasonally adjusted, “remained weak” in the first quarter of 2019 with imports into the US and China in particular dropping quite sharply. But it is the US stock market that will finally bring Trump and his voodoo economic advisers to their senses. There have been enough minor tremors in the market of late to suggest that the “big one” is close. Unfortunately, that event and its aftershocks will hurt us all. Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs