A Fork in the Smartphone Road

Well, the Chimerica trade and technology war has been taken to new heights over the weekend, both in terms of policy and in global markets.

After President Trump raised the tariffs on China again, this time 10% on $300 billion in Chinese imports not covered by earlier rounds of tariffs on China, China is retaliating with both active and passive measures.

Passively, China is refusing to prompt up the devaluing Chinese currency, the yuan, allowing it to break through 7 against the dollar for the first time since prior to the Great Recession.

Actively, the Chinese Customs Tariffs Commission of the State Council has not ruled out import tariffs on newly purchased U.S. agricultural products after August 3 (this past Saturday).

While the American and Chinese leaders continue with their Great Game of Trade Chicken, Chinese state media has made an interesting announcement: That Huawei is testing a $288 smartphone running its self-developed HongMeng OS, which Reuters is reporting could go on sale later this year.

Could this eventually lead to a global fork in the smartphone OS market, which is currently largely dominated by Google’s Android (and on which most Chinese smartphones are based)?

Probably not in the short term, but longer term…?