Trade

Trump Makes Final Mockery of “National Security”

SK Ashby
Written by SK Ashby

Trump's Department of Commerce placed Chinese-owned telecommunications giant Huawei on the export-control "blacklist" nearly two years ago because the company is allegedly a threat to national security. Being on the blacklist means American-owned companies cannot sell their goods or services to Huawei even if the goods are used by Huawei here inside the United States.

You may recall that the Commerce Department had to work backward from Trump's decision to sanction Huawei. The announcement originated at the White House and the department had to play catch-up and decide what the regulation and legal policy would actually look like. That left American businesses confused because Trump had seemingly crippled their business but the federal government had not told them what the policy really is because there was no policy on paper yet.

To give themselves time to implement Trump's orders, the Commerce Department issued a series of waivers that allowed American-owned businesses to continue doing business with Huawei while the government searched for some justification to say that their business is a threat to national security.

Almost two years later, the Trump regime still hasn't spelled out how an American telecommunications company selling off-the-shelf parts to Huawei is a threat but, in the final days of Trump, they're revoking some waivers they already granted and denying many more.

NEW YORK/WASHINGTON (Reuters) - The Trump administration notified Huawei suppliers, including chipmaker Intel, that it is revoking certain licenses to sell to the Chinese company and intends to reject dozens of other applications to supply the telecommunications firm, people familiar with the matter told Reuters. [...]

Commerce said it could not comment on specific licensing decisions, but said the department continues to work with other agencies to “consistently” apply licensing policies in a way that “protects U.S. national security and foreign policy interests.”

In an email seen by Reuters documenting the actions, the Semiconductor Industry Association said on Friday the Commerce Department had issued “intents to deny a significant number of license requests for exports to Huawei and a revocation of at least one previously issued license.” Sources familiar with the situation, who spoke on condition of anonymity, said there was more than one revocation. One of the sources said eight licenses were yanked from four companies.

The email noted that companies had been waiting “many months” for licensing decisions, and with less than a week left in the administration, dealing with the denials was a challenge.

In 2020 about a year after Huawei was originally blacklisted by the Commerce Department, sanctions against the company were expanded to also cover foreign-owned businesses that sell technology to Huawei if the technology was manufactured using American-owned patents.

Yesterday's decision to revoke or deny licenses and waivers apparently applied to both foreign and domestic businesses according to Reuters. At least one Japanese-owned chipmaker had their license revoked alongside Intel.

As far as I can tell, the Trump regime hasn't offered any explanation for the latest decision but that's no surprise given that there was no explanation for every previous decision.

This policy will not be final for over 80 days including the legally required time that businesses have to challenge the decision and that means the incoming Biden administration could potentially reverse the order. I think it will be difficult for the Biden administration to justify keeping Huawei on the blackist in the first place without offering a more transparent explanation for it.

The best explanation we currently have for the sanctions against Huawei is that Trump imposed them because he was looking for more leverage in his trade war with China. Trump believed that a "maximum pressure" campaign would force the Chinese government to submit to his nonsensical demands, but it didn't.

The blacklisting of Huawei and a growing list of other Chinese-owned companies has all been an extension of Trump's trade war and the global economy cannot fully heal until his war is over. Moreover, if the goal was to protect our national security, we have to say the policy failed because China's economy is in a stronger position than our own after Trump.