THE LEX COLUMN: US paranoia rails against China
Tariffs will hit earnings of train maker but only modestly
US authorities have long feared China could use telecoms equipment made by Huawei or ZTE for spying. Reasonable suspicion may be tipping over into paranoia when Americans worry train coaches manufactured by China Railway Rolling Stock Corp (CRRC) could be eavesdropping hotspots. Phone chat in transit is rarely racier than: “I’m on the train” or “meatballs for dinner?”. CRRC, listed in Hong Kong and Shanghai, is the latest target in the refrozen war between West and East even so. Some senators oppose CRRC’s pitch in a $1bn contest to build up to 800 coaches for Washington DC. This state-controlled group has a US foothold of which Huawei can only dream. CRRC has won four of the five main US subway coaches contracts, and is bidding for a $4bn deal in New York. It is harder for the US to blacklist CRRC than old enemy Huawei. It boasts no big homegrown subway coachmaker. South Korea’s Hyundai Rotem or Japan’s Kawasaki Rail Car would normally charge US cities hundreds of millions more. Th...