Trade war pits US coal miners against tech barons

The ongoing US-China trade war squarely places President Donald Trump’s biggest supporters – American coal workers –  on the other side of the barricades against some of the president’s biggest detractors, including Silicon Valley–based tech barons such as Alphabet co-founders Larry Page and Sergei Brin.

Vinton Cerf, the American scientist credited as one of the “fathers of the Internet” and currently Google’s chief Internet evangelist and vice-president for global policy, acknowledged that Google is squarely in the middle of the trade war being fought by Trump and Chinese President Xi Jinping over technology-transfer issues.

This year, Trump directly threatened the economic viability of China’s Huawei Technologies Co by unilaterally banning US tech companies such as Google from transferring technology such as its market-leading Android operating system to China’s global tech champion.

Even after temporarily rescinding the technology transfer ban, Trump later reignited the US-China tech trade dispute by ordering US companies to stop manufacturing in China under the auspices of US national-security laws barring trade with “rogue nations.”

Cerf, who serves as Google’s chief diplomat, noted that the company has had a highly tempestuous relationship with China ever since Google first pulled out in 2010 after Beijing ordered wide-scale restrictions on its main breadwinner, Google Search.

Google also enraged Beijing leadership by prematurely – albeit in hindsight – agreeing to stop supplying Huawei and ZTE with Android technology when Trump first made the transfer technology-ban edict in June.

“Google should have waited a little bit before announcing it would stop working with Huawei. Its  decision to shoot so quickly from its hip has made it some very bad enemies in Beijing,” an international trade lawyer in Washington said.

Huawei’s dependency on US technology from Google’s Android operating system to Intel semiconductors triggered a heated debate at the highest levels of the Chinese government on why there remains such a wide technology gap between the United States and China, a Hong Kong investment banker said.

The banker said that leaping over the United States as a technology leader is a cornerstone of Chinese national policy and the Huawei/Google incident was a “stark reminder” of how wide the tech gap between the US and China remains.

While tech giants such as Apple, Intel and Google will ultimately suffer heavy financial losses as Chinese tech companies seek to outsource non-US controlled suppliers, US coal miners may end up the winners in the trade war.

The US coal industry, especially its approximately 57,000 workers, was one of the key factors in electing Trump president in 2016 as they singlehandedly swung the purple states of Ohio and Pennsylvania to Trump after his Democratic opponent, Hillary Clinton, all but vowed to end the US coal industry if elected.

Speaking at the National Press Club in Washington, DC, on Wednesday, United Mine Workers of America (UMWA) president Cecil Roberts said US coal workers had never faced as much personal animosity from such a large sections of the US population as they do today, especially among those combating climate change.

Coal miners, the same community who were instrumental in handing the Democratic primary and subsequently presidential election to John F Kennedy in 1960, are now painted as climate-change-denying pariahs by large swaths of Democratic Party supporters, Roberts said.

He also noted that the UMWA was the first fully integrated American union, already accepting black members since its foundation in 1890, and that the bigotry against coal workers – as against the descendants of slavery – is nothing new in the US.

For Roberts, a West Virginia native and Vietnam War veteran, such hostility against coal workers is rooted in bigotry and entirely ignores the fact that the coal industry is global, with an expected 1,000 new coal-fired power plants being built on top of 2,000 already operating.

While global demand for coal is estimated at about 7.5 billion metric tons, of which 4 billion is consumed by China alone, US coal workers are facing devastation as a series of high-profile bankruptcies by large operators such as Arch Coal, Patriot Coal, and Peabody Energy are leaving workers without jobs, medical insurance and pension benefits.

However, Roberts said Trump’s tariffs on Chinese steel and other metals are starting to bring a noticeable boost to metallurgical coal as “people now realize we can make steel again in America.”

While not directly advocating for Chinese direct investment in US coal operators, Roberts noted that Chinese coal operators are already cutting down on their domestic workforces because of cost restraints and efficiency issues.

The owners of American coal mines do not have many qualms about selling to Chinese or other foreign investors. The then-CEO of Massey Energy, Don Blankenship, told this journalist he would have no qualms about selling his company to the Chinese or Indians after hosting a pre-Trumpian “Friends of America” rally in the heart of West Virginia coal country in September 2009.

Coal workers are the best example of a growing, and possibly irreparable, divide between the Democratic Party and American blue-collar workers. The best example of this divide between coal workers and the well-paid tech workers is seen in the presidential campaign of Taiwanese-American tech entrepreneur Andrew Yang and his platform of minimum income to those lost in the US climate and tech revolutions.

Yang, who ranks among the top four running for the Democratic presidential nomination, offers an extremely dystopian outlook for the future of labor in the United States, claiming his proposed minimum income is needed to offset lost economic opportunities as human labor such as coal mining is replaced by artificial intelligence and new climate-tech jobs.

Yang is highly pessimistic that the US workforce can adapt to the new tech revolution, noting that only 8% of the American workforce is employed in STEM (science, technology, engineering and math) related work fields.

Meanwhile, other countries such as Estonia are already teaching third-graders information-technology skills, making the former Soviet satellite a global leader in cybersecurity, said Tallinn-based developer and Devtailor co-founder Janno Stern.

While Yang’s views are widely shared by other climate-tech barons such as Tesla’s Elon Musk and Democratic candidates such as Elizabeth Warren and Bernie Sanders, the same climate-change views are interpreted by many blue-collar workers as evidence that the Democratic Party and Silicon Valley would be happy to see them out on the street.

It remains to be seen if the UMWA will follow the footsteps of the Teamsters and endorse President Trump just as the truckers union’s leader Jimmy Hoffa endorsed Richard Nixon against George McGovern in 1972.