Home Army Technology US tug-of-war over Huawei risks spilling into trade talks – Nikkei Asian Review

US tug-of-war over Huawei risks spilling into trade talks – Nikkei Asian Review

6 min read

WASHINGTON — The American tech industry is pressing U.S. President Donald Trump to follow through on his promise to ease trade sanctions on Huawei Technologies, but reports of the Chinese telecommunications giant’s involvement in North Korea have emboldened hard-liners to block any thaw.

Chief executives from seven technology companies, including Google, Intel and Qualcomm, met with Trump Monday in Washington to discuss trade policy toward Huawei. The tech executives expressed “strong support” for Trump’s restrictions against the company while the president agreed to “timely licensing decisions from the Department of Commerce,” according to the statement from the White House.

The executives have been struggling to understand exactly what type of business with Huawei is allowed after the company was placed on the so-called Entity List in May, which greatly restricts it from receiving vital U.S. technology exports. However, China hawks in Congress are seeking more stringent measures, citing Huawei’s potential role in helping North Korea build a 3G network.

A drawn-out tug-of-war over Huawei threatens to hinder the renewed trade talks between the U.S. and China. The conflict will also impact companies in Japan and other parts of the region that ship components to the company, and set the stage for a complicated restructure of the supply chain.

After speaking with Chinese President Xi Jinping in June, Trump said he would allow transactions between Huawei and U.S. suppliers that do not threaten national security. Senior White House officials later said permissible items would include certain low-tech products and generic merchandise that can be obtained in South Korea, Taiwan and Vietnam. But members of the administration are divided on where to draw the line.

When the Commerce Department in May placed Huawei on the blacklist of companies deemed security risks, the agency instituted a 90-day window for maintaining network infrastructure and supporting mobile services. The Commerce Department is considering specific changes to trade sanctions, and aims to reveal the modifications by the time the grace period ends on Aug. 19, a senior department official said.

Meanwhile, a Washington Post report on Monday detailed how Huawei has provided equipment and service for building North Korea’s 3G network.

The findings attracted bipartisan condemnation. “At every turn, we learn more and more about what a malign actor Huawei is,” Republican Senator Tom Cotton and his Democratic colleague Chris Van Hollen said in a statement. The two vowed to pass legislation to counter the “growing national security threat” stemming from Huawei.

Huawei responded, saying it “has no business presence” in North Korea, and that it is “fully committed to comply with all applicable laws and regulations in the countries and regions where we operate.”

When asked by the media about Huawei’s ties with North Korea, Trump said, “We will have to find out.”

Huawei has also reportedly been linked to China’s People’s Liberation Army, as well as its involvement in the state surveillance of ethnic Uighurs, a Muslim-majority population that lives in mostly western China. The senior Commerce Department official expressed deep concerns over those reports, indicating that the office will take those issues into account when revising the Huawei sanctions.

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