Marco Rubio: We Want Huawei Restrictions to Stay

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US Senator Marco Rubio promised on Twitter that restrictions against Chinese telecom giant Huawei would be here to stay, after President Donald Trump said during the G20 summit in Japan that he intended to lift restrictions.

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In May, the US government put Huawei on a ‘sanctions list’ and labelled it as a national security threat due to connections between Huawei and China’s intelligence services as well as the People's Liberation Army. Since then, Huawei has been largely cut off from the US supply chain with many tech giants ending supply of components and software out of compliance with US law. However, Huawei has said it can last a half-year on current reserves of parts and is rapidly trying to build up its own domestic supply chain.

Rubio’s comments were echoed by the Senate’s Democratic Leader Charles Schumer.

For its part, the White House has said that Trump’s comments do not mean that Huawei is being given “amnesty” from sanctions.

“All that is going to happen is Commerce will grant some additional licenses where there is a general availability” of the parts the company needs, National Economic Council chairman Larry Kudlow is quoted as saying: “This is not a general amnesty.”

In June, Huawei’s co-founder and Chief Executive Officer Ren Zhengfei said the company would “bounce back” by 2021 while expecting substantial drops in international smartphone sales this year and next.

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Diplomacy in the Trump Era

It’s unlikely that the US will reverse its stance on Huawei without major concessions from China on trade and territorial expansion within Asia. Given the bi-partisan support for restrictions on Huawei in both Congress and the Senate, this issue is potentially more of a product of Trump not understanding how these restrictions work rather than a reversal in policy.

While the US has strict sanctions on doing business with Huawei, the restrictions only impact products with 25% or more of US-originated technology or materials. In addition, to ease the shock of Huawei being cut off as a customer -- as Huawei is one of the world’s biggest smartphone vendors by shipment volume -- US firms are allowed to provide goods and services to maintain existing Huawei products. For instance, Google is allowed to provide Android updates to Huawei to ensure that the OS remains secure.

That being said, the inconsistency put forward from the White House on the Huawei file isn’t good for the tech industry at large. The industry needs policy that's predictable and stable in order to build roadmaps for products. It’s also not helpful for the lawsuit Huawei has launched against the US government, which argues that the ban placed against its products is “arbitrary and capricious”.

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