The Star of the East

China, Huawei, Sanctions, United States

How the U.S campaign against Huawei hit a domestic roadblock

For the past few weeks there was speculation and coverage that the White House was moving forwards on enhanced restrictions to the Chinese telecommunications firm Huawei. Although the details were never publicly specified, it was claimed the administration sought to reduce the threshold on what classified “American made” components in overseas products which involved the firm from 25% to 10%, aiming to close down a loophole and further limit the scope of materials U.S companies could supply to the company in foreign supply chains. At the Davos forum in January, Secretary of Commerce Wilbur Ross had confirmed there were discussions on new regulations underway.

However, behind the scenes things hit a roadblock. Reports from the Washington Post and New York Times stated that officials in the Pentagon and Department of Defence objected to the new rules, pushing the administration to shelve the proposal. Their argument is that the proposals weakened American innovation, technological competitiveness and therefore actually served to harm the country’s security interests, as well as hurting big technology companies who also lobbied extensively against the Huawei ban since its imposition last May. Ultimately, regardless as to where the administration goes from here, there are telling suggests that Washington is not as unified as it is appears in waging a campaign against the company.

Instead, the Huawei saga in Washington has been a continual tug of war behind the scenes. On one hand, there are deeply ideological, Neoconservative hawks who wish to strangle the company in the strategic pursuit of maintaining American technological supremacy, and on the other hand there have been individuals who argue the company is ultimately important to American interests, business and innovation. This power struggle has produced a contradictory approach from the beginning. Whilst the administration blacklisted the company, they nevertheless quickly opened up a series of windows allowing business with it to effectively continue. Not long after, Donald Trump also quickly moved to relent the ban by the issuing of Commerce Department licenses, having been hit with heavy lobbying by Silicon Valley CEOs.

This scenario reveals the fact that whilst some figures are crusading against the company and have clout over media discourse, the pragmatic reality remains that pushing back against Huawei imposes some costs for America. Despite the ban, Huawei remains a global technology firm which sustains an influential role across multiple continents. It continues to be the world’s largest provider of 5G patents, whilst it has moved quickly to divert the impact of the American ban and configure leading generation smartphones without U.S made components. In this light, critics of the ban observe that the administration is effectively risking a self-imposed isolation, weakening U.S tech markets from global trends and ironically, cutting America itself off from leading sources of technology, than the intended other way round.

In light of this, it is uncertain what will happen with the proposed “New rules” given more discussions are scheduled from February but either way it is quite obvious that despite the noises from congress and mainstream media cynicism, there is no true national consensus or unity concerning the campaign against Huawei. Escalation of the situation continues to come with the risks that it may harm American relations with overseas suppliers, including in Taiwan, South Korea and Japan, all whom see business with Huawei and China at large as essential, and thus despite their position as allies see less incentive in total decoupling from China.

Therefore, whilst the administration continues to be consistent on its anti-Huawei line and look for a counter to its 5G dominance, the extent by which they are likely to push back against the company on a domestic level has clear limits. Although America’s attitude towards the Shenzhen company appears on the surface to be very dogmatic, in practice its actually a love-hate relationship wherein different interests of the United States continue to clash behind the scenes.