Foreign Ministry Spokesman Geng Shuang said that Washington should stop “repeating fallacies” about U.S.-China trade following comments by U.S. President Donald Trump that China “broke the deal” and the U.S. tariffs “are having a devastating effect on China”. Geng added that the U.S.’ unilateral and protectionist measures have faced strong opposition from its people and widespread criticism from the international community. “We hope the U.S. will clearly understand the situation, pull back before it’s too late and return to the right track,” he said.

Geng also urged the U.S. to stop attacking Huawei. “It is very disgraceful and immoral that the U.S. uses its state power and set in motion the whole state apparatus to crack down on a private Chinese company.”

China’s retaliatory tariffs on USD60 billion of U.S. imports entered into force on June 1.

Huawei filed a motion in a U.S. court for a summary judgment to have the U.S. ban on Huawei equipment sales to federal agencies and contractors overturned. The move comes nearly three months after Huawei filed a lawsuit against the U.S. government at the U.S. District Court in Plano, Texas, arguing that the federal ban, outlined in section 889 of the 2019 U.S. National Defense Authorization Act (NDAA), is unconstitutional as it singles out a person or a group for punishment without trial. Glen Nager, Huawei’s Lead Counsel for the U.S. case and a Partner at Jones Day, said that Section 889 of the 2019 NDAA “violates the Bill of Attainder, Due Process, and Vesting Clauses of the United States Constitution”. He said the case was purely “a matter of law” as there are no facts at issue, thereby justifying the motion for a summary judgment to speed up the process. “The fact is, the U.S. government has provided no evidence to show that Huawei is a security threat. There is no gun, no smoke. Only speculation,” said Huawei’s Chief Legal Officer Song Liuping. The hearing for a summary judgement has been set for September 19.

Huawei Founder Ren Zhengfei said he attaches great importance to fundamental research and education, and the country should invest more in developing mathematicians, physicists and chemists instead of just pouring money into industries. It is becoming more urgent for Chinese tech companies to attract talent, as the tech war will eventually become a battle for more talent, analysts said. “Our country has to have an awareness of crisis, and to clearly see the real gap between China and the U.S. in education,” said Chu Zhaohui, Research Fellow at the National Institute of Education Sciences in Beijing.

Uncertainty over the deployment of Huawei equipment is starting to cause headaches for rural communications providers in the United States, after U.S. President Donald Trump issued an order barring U.S. network operators from acquiring or using equipment from Huawei. Implementation of the order was suspended for 90 days till August 19 so operators could adjust to the situation. Replacing Huawei equipment would be very costly. The Rural Wireless Association has estimated that Huawei equipment is used by 25% of U.S. rural wireless carriers, and it would cost small providers USD800 million to USD1 billion to replace all of their Huawei equipment. Jim Kail, President and CEO of LHTC Broadband calls it unfortunate that his company is caught in the trade war. The company, which employs more than 50 people, provides telecom services to customers across 500 square kilometers of rural Pennsylvania. “Huawei is competitively priced and turned out to be of good quality. The other products are good quality, but more of a price issue,” Kail said, adding that he did not encounter any security issues since starting to use Huawei equipment. He concluded by saying: “The customer doesn’t care which vendor you are using.”

The Institute of Electrical and Electronics Engineers (IEEE) has decided to ban Huawei employees from reviewing papers, outraging Chinese academics. Several U.S.-based standards-setting organizations already cut ties with Huawei earlier. But Huawei’s memberships in the SD Association and Wi-Fi Alliance were reinstated. Some Chinese academics consider the irresolute and changeable attitude of these U.S.-based industry bodies “an absolute joke.” The China Computer Federation protested IEEE’s ban on Huawei, urging its members not to contribute any papers to the Communications Society (ComSoc) of IEEE, and immediately halt all contact with ComSoc, the Global Times reports. According to the China Daily, Huawei has joined more than 400 standards organizations, industry alliances, and open source communities, in which its staff members have served in more than 400 key positions. The company submitted more than 5,000 standard proposals and nearly 60,000 related articles last year.

Wang Zhijun, Vice Minister of Industry and Information Technology, said that the impact of raised tariffs on China’s manufacturing sector is generally controllable. The USD200 billion worth of Chinese goods on which the United States imposed additional tariffs accounts for 41.8% of China’s exports to the country, but only 8% of China’s total exports. Moreover, about half of the affected enterprises are foreign-funded enterprises, including many American companies. In other words, the tariff hikes hurt not only the interests of Chinese enterprises and consumers, but also those in the U.S., as well as the global supply chain, said Wang.

Meanwhile, preparations are in full swing for a meeting between Chinese President Xi Jinping and his American counterpart Donald Trump at the end of June on the sidelines of the G20 meeting in Osaka, Japan. Trump, however, said that the U.S. was not ready to conclude a trade deal with China.

The trade war is also affecting travel between the two countries. According to the U.S. National Travel and Tourism Office, travel from China to the U.S. declined 5.7% last year to 2.9 million visitors. This is the first time since 2003 that Chinese travel to the U.S. has dropped from the previous year. Chinese people began canceling holiday trips to the U.S. as early as November and December. The U.S. has had a trade surplus with China in travel over the last decade. The total number of Chinese arrivals in 2000 was 249,000, a number that grew to 802,000 in 2010, and to 3,174,000 in 2017. Chinese spend an average USD6,700 per trip – about 50% more than the average international visitor.