Tense U.S.-China Relations Over Spy Balloon Debacle Bleeds Over Into Trade

(RepublicanDaily.org) – Surmounting tensions over the Chinese surveillance craft that were shot down over United States airspace earlier in February are now bleeding into the supply chain, CNBC reported. Leading retailers and trade associations are closely watching the rising tension, anticipating its impact on both the supply chains and the markets.

Senator Tim Kaine (D. Virginia) reiterated to Fox News the importance of keeping a “thorough and robust” line of communication open with China. Kaine explained that there must be open communication between the “two most powerful nations in the world” to prevent miscalculations, recalling the days of the Cold War, when, even under the strained relations, U.S. and Soviet officials continued dialogue.

The U.S. Commerce Department added six new companies to the trade blacklist, Fox News reported. The trade blacklist bans United States business entities from doing business with the blacklisted entities.

Tariffs enforced by President Biden and former President Trump, as well as China’s response to the pandemic had already steered American manufacturers away from China, CNBC reported. Manufacturers had been migrating their facilities to alternative countries such as Vietnam and the Philippines. The revised NAFTA trade pact between the United States, Canada, and Mexico is reportedly also increasing opportunities for the North American supply chain.

Earlier in February, the Pentagon announced it had intercepted a Chinese surveillance balloon over United States airspace. The balloon was first spotted in Alaska and floated over the United States before it was eventually shot down in the Atlantic Ocean. A civilian had spotted the balloon above Montana, but Pentagon officials said they were reluctant to act then due to concerns about threats to civilians on the ground, The New York Times reported on February 4.

A harsh response has come from China following the initial incident. Chinese Communist Party officials claimed that the United States has flown 10 similar aircraft over Chinese national airspace “in the past year,” Fortune magazine reported.

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