Trade

Trump Regime Expands Sanctions on Huawei

JM Ashby
Written by JM Ashby

If you figure -- based on recent statements from the Chinese government to that effect -- that fulfillment of Trump's "greatest deal" with China may be contingent on the latter's decision to impose more sanctions on Chinese companies, the Trump White House is beating a dead a horse at this point.

The Trump regime had already expanded their export controls or blacklisting of Chinese-owned telecommunications giant Huawei in a move that primarily harmed Taiwan's largest employer and semiconducter manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), but the regime has expanded the blacklist again.

The new restrictions will block more companies from selling technology to Huawei, but these aren't Chinese companies. Some of them are American companies or companies in allied foreign countries who manufacture goods using American technology.

Industry experts say the new restrictions are a threat to the entire industry supply chain.

“If the choking of Huawei continues there will be reverberations across the semiconductor complex,” said Neil Campling, head of TMT research at Mirabaud Securities. “And the retaliation from China remains unknown and a significant risk.” [...]

Huawei’s HiSilicon division has relied on software from U.S. companies such as Synopsys to design its chips. It outsourced the production to Taiwanese contract chipmaker TSMC, which uses equipment from U.S. companies.

In Asia, memory chipmakers including South Korea’s Samsung Electronics and SK Hynix, Japanese image sensor maker Sony and Taiwanese chipset maker MediaTek may be affected, a chip industry source said.

In Europe, German chipmaker Infineon, which counts Huawei as a key customer for its power management products, and Austrian sensor specialist AMS said they were reviewing the impact of the latest U.S. restrictions.

China's Ministry of Commerce released a statement last week that all but explicitly said Trump has to stop sanctioning Huawei if we want them to buy our pork and soybeans. The United States must "create the conditions" to fulfill the terms of "phase one" of Trump's trade deal, the statement said.

Are we creating the conditions? It doesn't look like it.

The only thing we're creating the conditions for is a technological or economic if not actual cold war and the United States may not even be the primary beneficiary of a technological arms race. The Trump regime has responded to Huawei's investments in 5G infrastructure by promoting Sweden's Ericsson and Finland's Nokia.

The war on Huawei is based on the idea that the company is a threat to our national security. I don't know if that's true, but that is far less of a stretch than to say foreign companies selling their own goods to Huawei are a threat to our national security if they use American patents or software to do it. Each new publicly unsubstantiated and unjustified restriction feels more arbitrary than the last.

Whether or not we should engage in an ideological war with China is something we haven't really debated in public at all and it's not even something I'm necessarily arguing for or against myself, but the Trump regime is laying the groundwork for a war and it could last a generation beyond the end of Trump's regime. The next decade or two, or several, of foreign policy toward China could stem from what's happening right now under a criminal presidency that lost the popular vote; a presidency acting for poorly-defined reasons that we can't necessarily assume aren't corrupt.

  • muselet

    For all the America First! chest-thumping this administration does, isn’t it odd how often its actions benefit other countries?

    The Chinese government is not particularly trustworthy, but the Trump administration is making the US look worse. Taking a quieter, more diplomatic approach could have avoided the multiple trade wars and the noisy dust-up over Huawei. Any other country looking at what has actually taken place must be wondering if China’s not the more reliable trading partner.

    The wreckage Donald Trump will leave behind him when he finally gets evicted from 1600 Pennsylvania Avenue will take decades to clean up.

    –alopecia