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The United States is Right to Exercise Caution over Huawei—But Donald Trump Risks Missing his Target

July 25, 2019

It’s unlike U.S. President Donald Trump to miss a chance to rattle a stars-and-stripes saber. And in Huawei he has a double-win: a company derided by rights groups and liberals for its dubious privacy record, from a country Trump loves to beat up on for his nationalist voter base.

This Monday the President met Silicon Valley CEOs at the White House, who, according to a Bloomberg report, expressed “strong support” of his restrictions on American buying of Huawei technology. That is unsurprising, given the Valley’s opportunity to lose billions in trade from Chinese companies that are moving faster, with less regulation.

At the same time Huawei Technologies founder and CEO Ren Zhengfei said he expects to ship 30% more handsets worldwide, as Asian demand makes up for the U.S.’ reticence for Huawei’s products. Huawei now represents more than 46% of China’s domestic phone market—and is set to gain even more share in 2020.

The White House has signaled its intent to conduct increasingly broad meetings over Huawei and other Chinese tech companies, after Trump and Chinese premier Xi Jinping met in Japan late June. The meetings comprise a growing glasnost between the two superpowers, after negotiations crumbled in May, threatening the global economy.

U.S. Intelligence and security officials have pushed for a complete ban on Huawei, whose privacy record has been called into question amid growing restrictions on privacy in China itself—and the tech-powered human rights catastrophe in Xinjiang.

Britain and other western nations have, however, paved the way for Huawei technology to enter their domestic markets. Trump will likely do the same. But in holding up Huawei as a valid reason to be hesitant on Chinese tech, the President risks throwing out the economic baby with his nationalist bath-water.

To use the easy political win of fighting Huawei (but, to be clear, relenting eventually), Trump may cool China’s, and his own, fiscal security—and encourage companies to act outside governmental purview. Trump must avoid this.

It does not mean going easy on China—quite the opposite, the U.S. should use its power to hold Xi’s repressive and worrying government to account—but the last thing America needs in testing times, is for its economy to founder even more. And an outright tech trade war will do just that.

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Filed Under: Uncategorized

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