He Got it Right, For Now

16 May 2019

 

Cogito Ergo Non Serviam

Trump Blacklists Chinese Telecom Huawei

 

With an executive order, President Donald Trump has blacklisted the Chinese telecom giant Huawei. In essence, the company and about 70 affiliates can no longer acquire components and tech from US firms. The government can provide special waivers, but in general, Huawei and its units will have to find alternatives. A different order also bars US companies from using products from telecom companies deemed a threat to national security. Mr. Trump got this one right. It's not about free markets; it's about free societies.

The Huawei ban is, of course, tied to the tariffs and trade war Mr. Trump has begun with China. However, the ban is a smarter and more focused than the general tariff. It directly affects a potential problem company, and it does not require US consumers to subsidize the policy as the broader tariffs do. Because there are waivers, it allows the government to be lenient or strict as the situation demands.

Communications have always been part and parcel of national security. Huawei is a big actor on the telecoms stage, and it operates in a country where business is answerable to government. Allegations that the Chinese government uses Huawei technology and equipment to steal data abound. The main supplier of the African Union's telecoms in its Addis Ababa headquarters is Huawei. The BBC recently cited a Le Monde Afrique report from 2017 that stated "for five years, between the hours of midnight and 0200, data from the AU's servers was transferred more than 8,000km away -- to servers in Shanghai. This had allegedly continued for 1,825 days in a row." Huawei denies it had anything to do with the theft.

"This doesn't mean the company was complicit in any theft of data," said Danielle Cave of the Australian Strategic Policy Institute. "But . . .  it's hard to see how -- given Huawei's role in providing equipment and key ICT services to the AU building and specifically to the AU's data centre -- the company could have remained completely unaware of the apparent theft of large amounts of data, every day, for five years."

If the CIA, NSA, DIA etc., don't use Microsoft, Apple, etc. to gather information (wittingly or not), they are not doing their jobs correctly. It should not be a surprise if Huawei has close ties to the Ministry of State Security in Beijing. Indeed, it would be shocking if it did not.

However, just because such ties are to be expected does not mean that the US or any other nation should allow Huawei and the PRC to do as they please simply because there is a contract for goods and services in place.

Huawei has pointed out "It [the ban] will do significant economic harm to the American companies with which Huawei does business." It will "affect tens of thousands of American jobs."

In all likelihood, the Huawei ban will follow the pattern of the 2016 ZTE ban. The New York Times explained, "The Commerce Department added ZTE to the entity list in 2016 after determining that it had violated United States sanctions by selling American-made goods to Iran. Eventually, the department relented, and ZTE agreed to a hefty fine. But a year later, the Commerce Department said ZTE had failed to comply with the terms of the agreement, and American technology companies were barred outright from selling to the company.

"Cut off from American microchips and other parts, ZTE halted production and was near collapse until President Trump intervened and softened the punishment to appease the Chinese leadership."

One expects Mr. Trump to end this and declare a triumph, and that will prove a mistake.

© Copyright 2019 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.



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