US Policies, Export Controls Have Failed If Goal Was to Kill Huawei, Experts Say
Years after the U.S. first imposed trade restrictions against Huawei, the government’s strategy to restrain the Chinese technology company remains unclear, technology policy experts said this week.
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Although the U.S. added Huawei to the Entity List in 2019, experts speaking during a Jan. 27 Center for Strategic and International Studies event noted that the Commerce Department has continued to authorize billions of dollars worth of exports to Huawei (see 2303060013 and 2407020040). They also noted that several export control rules aimed at Huawei were tailored in ways that allowed the company to stockpile purchases of U.S.-made chips, effectively allowing Huawei to work around the restrictions.
Rebecca Arcesati, a lead analyst at the Mercator Institute for China Studies, a European think tank, said the EU has long viewed the U.S. stance toward Huawei with a “bit of suspicion,” especially “the lack of coherence that we often saw on the part of the U.S. government when it came to licensing.” Even as the U.S. was announcing export restrictions against the company and trying to convince its allies to do the same, Huawei “was still receiving a lot of chips, a lot of components, and it could stockpile,” she said.
“The strategy that appeared so restrictive and stringent on paper was actually enforced in a very erratic manner, and so I think that eroded a bit of trust as well among allies and partners,” Arcesati said. “The narrative now seems to be export controls just don't work. I think we need to look very carefully at how they've been implemented so far.”
James Goodrich, a senior adviser for technology analysis with the Rand think tank and a former Semiconductor Industry Association executive, also said U.S. policy toward Huawei has been “very conflicted.” He said part of the challenge has come from the debate between more hawkish officials who want to “go out and restrict Huawei” and U.S. businesses that want to continue selling to the firm.
“If the policy was to kill Huawei, that certainly has not been the actual policy that's been implemented by the U.S. government,” Goodrich said. “The U.S. government was not willing to sort of impose the harm that would be necessary to have a more dramatic effect on Huawei.”
He noted that the Trump administration has other options to tighten restrictions against Huawei, including through financial sanctions. Paul Triolo, the technology policy lead at Albright Stonebridge Group, called that the “nuclear option.” Placing blocking sanctions could have broad ripple effects on other economies and countries that use Huawei equipment in their telecommunications networks (see 2410150063).
“The Trump administration will also have to sort of reassess all of these things,” Triolo said. “If the goal was to kill Huawei, then arguably things like Treasury sanctions should be on the table.”
Arcesati said the U.S. could also choose to double down on export enforcement, including by doing more to stop China from stockpiling U.S. chips. “At a time when the U.S. government was trying to persuade allies and partners to restrict Huawei from their 5G network roll out … Huawei was still receiving a lot of chips, a lot of components, and it could stockpile,” she said. “I wouldn't underestimate the importance of enforcement.”