U.S. sanctions on Huawei could backfire
The Trump administration’s plan to restrict exports to Chinese telecommunications powerhouse Huawei for national security reasons doesn’t just up the ante in the China trade war.
It could also hurt U.S. suppliers and accelerate Beijing’s drive toward greater technological independence.
The White House issued an executive order Wednesday apparently aimed at banning Huawei’s equipment from U.S. telecom networks and information infrastructure. The U.S. government also said it was subjecting the Chinese company to strict export controls.
The U.S. government has long insisted that equipment from Chinese suppliers, including Huawei, poses an espionage threat. But U.S. officials have presented no evidence of any Huawei equipment serving as intentional conduits for espionage by Beijing.
About one-third of Huawei’s suppliers are American and, ironically, many of the computer chips, memory and other components it gets from U.S. companies are made in China, said Roger Entner, founder of telecom research firm Recon Analytics.
The company’s flagship smartphone, the Mate 20 Pro , includes chips made by Skyworks Solutions Inc. and a wireless receiver made by Integrated Device Technologies, both U.S. companies.
The U.S. sanctions are “going to have ripple effects through the entire global telecommunications network,” said Kevin Wolf, who was assistant secretary of commerce for export administration under President Barack Obama.
If Huawei “can’t get the widget or the part or the software update to keep functioning, then those systems go down,” he said.
The Commerce Department said Wednesday evening that the restrictions would “prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests.”
Huawei responded Thursday by saying that having to get U.S. government approval for all purchases of American technology is “in no one’s interest.”
“It will do significant economic harm to the American companies with which Huawei does business, affect thousands of American jobs, and disrupt the current collaboration and mutual trust that exist on the global supply chain,” the company said.
Huawei is already the biggest global supplier of networking equipment, and Entner said it is poised to overtake Samsung as the No. 1 smartphone manufacturer.