American chip makers lobbied to ease U.S. export controls on Huawei
July 9, 2019 Category IT & Telecom, Weekly
President Donald Trump’s decision to allow U.S. companies to continue selling to Huawei followed an extensive lobbying campaign by the U.S. semiconductor industry that argued the ban could hurt America’s economic and national security. In multiple high-level meetings and a letter to the Commerce Department, the companies argued for targeted action against Huawei Technologies instead of the blanket ban the Trump administration imposed in May. That includes identifying specific technologies that the Chinese company shouldn’t be given access to, while allowing U.S. firms to supply the rest.
The Semiconductor Industry Association (SIA), a trade group that represents companies including Intel, Broadcom and Qualcomm, told the Trump administration that its sanctions against the Chinese company will make them appear to be undependable partners, which will put them at a severe disadvantage globally.
Representatives of chip makers last month met with Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin to argue that the decision to place Huawei on the Entity List could hurt the country. In the letter, SIA said that the action risked cutting off its members from their largest market and hurting their ability to invest. At the same time, Huawei would in many cases be able to get components elsewhere, they argued.
“Overly broad restrictions that not only constrain the ability of U.S. semiconductor companies to conduct business around the world, but also casts U.S. companies as risky and undependable, puts at risk the success of this industry, which in turn impacts our national security,” the group wrote last month. Apparently Trump listened, telling Chinese President Xi Jinping in Osaka that American firms weren’t pleased with his Huawei policy and announcing that he had agreed to let them keep shipping some of their components and technology. He later clarified he will only allow them to sell “equipment if there is no great national emergency problem with it,” without offering more details. Trump’s comments stoked confusion among industry and analysts, and the White House has not yet announced specifics on the path forward for U.S. companies doing business with Huawei, the South China Morning Post reports.
China is U.S. chipmakers’ biggest market, providing about a third of revenue. They are arguing that not all exports to Huawei and its affiliates pose a security risk and that much of what is sold there is easily replaceable with non-U.S. products. But National Economic Council Director Larry Kudlow emphasized: “Anything to do with national security concerns will not receive a new license from the Commerce Department. I think that’s very important.”
Huawei Founder Ren Zhengfei said that Trump’s decision to relax the ban “would not have much impact on what we are currently doing. We will still focus on doing our own job right.” He added Huawei is willing to continue to buy products from U.S. companies.
In Britain, Vodafone confirmed it is continuing to use Huawei equipment in non-core parts of its network
infrastructure for the 5G rollout, even though Huawei equipment could be banned if the UK government were to join in United States-led restrictions on the Chinese company. Last week, Vodafone launched 5G in Birmingham, Bristol, Cardiff, Glasgow, Manchester, Liverpool and London. Twelve more cities will soon follow. “We are proud to be helping Vodafone open up a new world of seamless opportunities with their launch of 5G mobile services in the UK,” Victor Zhang, Senior Vice President of Huawei, told Xinhua News Agency. Vodafone recently also launched the first commercial services of its 5G mobile network in 15 Spanish cities, in 12 of them in cooperation with Huawei.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world