US firms resist new move to ban Huawei

News

Despite reports that the Sino-US trade war is coming to an end, fighting talk continues on all sides.

Some US tech companies have reportedly resisted a request from the Trump Administration that they sign an agreement to stop buying supplies from certain Chinese entities, fearing it would constitute a cartel and break competition law.

This new initiative is led by Under-Secretary Keith Krach, who has been in office since June. The State Department wants network operators (including AT&T and Verizon) and silicon firms to sign up to a set of principles – which it calls the Global Digital Trust Standard – that would effectively ban Huawei from the US market and other companies too.

Some 27 industry groups have been given until 27 December to send feedback on the proposals, but they have asked for that deadline to be pushed back two months.

The Administration’s rationale is that Huawei’s equipment could be used by the Chinese state to spy on the countries in which it is installed.

Additional measures

The Administration already has sanctions in place against Huawei, although its enforcement has been postponed several times, which mean US companies must obtain a licence to sell to Huawei.

Sellers of chipsets for phones are receiving licences; those for use that go into network equipment are not, according to reports.

The Financial Times [subscription needed] says the refusal of US companies to sign up to the principles is part of a strengthening resistance by the American tech industry.

Some have described it as endangering the global tech supply chain, others as a naked attempt to stifle competition in tech: Huawei is widely seen as having the most advanced 5G technology.

Threats against Germany

Meanwhile, at the Handelsblatt industrial summit, Chinese Ambassador Ken Wu moved the debate on to new ground, implying that China would retaliate against any country that rejected Huawei’s 5G equipment in its infrastructure.

In an interview conducted in German he said, “It is important to the Chinese government that Chinese companies in Germany are treated the same as others, without discrimination.

“If the German government made a decision that led to the exclusion of Huawei from the German market, it will have consequences – the Chinese government will not stand idly by.

“See, last year, 28 million cars were sold in China, 7 million of them were German. Can we just declare German cars unsafe, because we can make our own cars? No, that would be pure protectionism.”

The translation was provided by Zero Hedge.