The Huawei muddle: Where national security meets Trump’s transactional worldview

With regard to US policy toward the Chinese telecoms giant Huawei, the purported truce negotiated between President Donald Trump and Chinese President Xi Jinping both solves nothing and increases the muddle and confusion. On the larger screen, President Trump caved without any real pre-concessions from Beijing — the resumption of trade negotiations, no new tariffs while talks continue, no Chinese commitments on structural reform, and upfront easing of restrictions on Huawei.

For this blog, Huawei is the issue. In a situation endemic to this administration, from the outset both the president and his top economic and security advisers attempted to redefine the results and walk back the extent of the concessions. To review, a month ago the US Commerce Department placed Huawei on a so-called “entity list,” which stops Huawei’s American suppliers from selling technology (components) to the company without a special license. While the ban, if fully enforced, would not bring Huawei to its knees, it would certainly affect its rollout of 5G wireless equipment and deal a blow its smartphone sales, as it is highly dependent on Google’s Android operating system.

Trump, briefly at the G-20, and top aide Larry Kudlow, later, downplayed the significance of the concession, arguing that the US would only allow sale of equipment that did not affect national security. Still, their belated explanations did not stem withering criticism from both Republicans and Democrats.

Here’s my take on all this. First, the most damaging element of the episode is the president’s transactional response to a highly critical national security issue. He directly tied Huawei’s fate to the final outcome of the US-China trade negotiations — and further underscored his limited, and willfully superficial, view of the gravity of the Huawei challenge by noting defensively that US farmers will benefit hugely from the trade truce and by a future trade deal. To be fair, some of his critics showed the same cast of mind. Senate minority leader Chuck Schumer (D-NY) blasted the president on the grounds that he had given away his most potent weapon to force a change in China’s mercantilist protection, saying, “Huawei is one of few potent levers we have to make China play fair on trade. . . . [Backing off] will dramatically undercut our ability to change China’s unfair trade practices.”

Second, while there can be a serious debate over how to handle Huawei, there is a strong case that the company does present a potential strategic threat to US national security. As discussed and analyzed in previous blogs and by numerous other security experts, Huawei’s position as the leading — if not dominant — provider of backbone equipment for future 5G wireless development is a central challenge to China’s military rivals.

As Huawei and Beijing have argued vociferously (and accurately), the US has yet to produce public evidence of malware or vulnerabilities in the company’s equipment. But that is irrelevant as the emergent 5G technology — with countless entry points into the system and constant software updates — will render protection against cyberespionage extremely difficult, if not impossible.

This brings us to the third immediate, dangerous result of the president’s instinctive transactionalism: It will badly undercut the administration’s years-long drive to persuade — and cajole — major US allies, particularly in Europe, to forego the use of Huawei baseline equipment in their rollout of 5G technology. Secretary of State Mike Pompeo and other top Trump administration officials have warned allies that their ability to communicate with the US military and intelligence would be jeopardized if they installed Huawei 5G equipment. And recently there has been a drumfire of criticism — not only from the Trump administration but also from outside experts — regarding Europe’s “compromise” of allowing Huawei to supply peripheral equipment. As telecommunications analyst Roger Entner has stated, “[In the 5G world] the physical distinction that currently allows you to insert security between hardware components goes away.”

The president’s decision to place Huawei on the trading block will make it almost impossible to counter European countries’ cybersecurity fantasies with regard to the company’s role in their 5G rollouts. Several decades ago, a US Treasury official is said to have vowed that the US would not trade off vital financial regulations for chicken parts. Today, however, the US may be on the verge of sacrificing cybersecurity for a few million bushels of soybeans.

(When the current US-China negotiations are further along, a future blog post will deal with the even more fraught implications of a ban of exports of semiconductor chips to Huawei.)