May 23, 2019

Huawei Blacklisted

Editor's note: We couldn’t be more proud of one of our teammates, Isaac Rose-Berman, who penned his first op-ed this week in USA Today: “How college students can bridge American divides: 'Study abroad' in Alabama or New York.” Please give it a read, and share far and wide!

“The Trump administration [last] Thursday officially added China’s Huawei Technologies Co Ltd to a trade blacklist, immediately enacting restrictions that will make it extremely difficult for the telecom giant to do business with U.S. companies.” Reuters

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From the Left

The left thinks there are real concerns regarding Huawei, but is divided on whether this hardball strategy makes sense.

“In the old days, when we were just buying China’s tennis shoes and solar panels and it our soybeans and Boeings, who cared if the Chinese were Communists, Maoists, socialists — or cheats? But when Huawei is competing on the next generation of 5G telecom with Qualcomm, AT&T and Verizon — and 5G will become the new backbone of digital commerce, communication, health care, transportation and educationvalues matter, differences in values matters, a modicum of trust matters and the rule of law matters. This is especially true when 5G technologies and standards, once embedded in a country, become very hard to displace."
Thomas L. Friedman, New York Times

Yet “neither the United States nor any of its allies has produced a ‘smoking gun’ proving that Chinese intelligence uses Huawei technology to penetrate other countries’ networks… It is legitimate for the United States to seek greater transparency from Huawei, both about its ownership and its strategic objectives in the global market. To the extent that the Trump administration’s latest step is an attempt to bolster its negotiating position on those issues, it may be justified. If it represents a deliberate attempt to bring down Huawei and provoke a broader economic rupture with China, it may not.”
Editorial Board, Washington Post

“The U.S. has long criticized China for using ‘national security’ as an excuse for trade protectionism. Now the U.S. might be playing the same game… Security and national origin may be related, but they’re not the same thing. In order to accomplish important cybersecurity goals without causing unnecessary confusion or cost for businesses and consumers, the U.S. government should be targeted and transparent in laying out the scope of ‘foreign adversary’–based IT regulations.”
Samm Sacks and Graham Webster, Slate

Some point out, “Now that Trump has gotten rough with Huawei, he would pay a real strategic cost for backing down. It is hard enough to get European and other countries to forego the use of Huawei’s 5G technology, or commit to an economic counter-offensive against China, given the lure of Chinese trade and investment. It will be harder still if Trump shows that he will leave any allies that do take a hard line in the lurch by cutting a bilateral deal with Beijing. Trump’s move against Huawei hasn’t just ratcheted up the intensity of the U.S.-China economic conflict. It has also put the president’s credibility at stake.”
Hal Brands, Bloomberg

Minority view: “Huawei calls what’s happening a ‘well-coordinated geopolitical campaign,’ and it may well be right… American tech needs a new narrative about its importance to the nation, and there is no better position for the companies than as the stalwart defenders against our greatest geopolitical rival, China…

“Worried about tech’s surveillance of your everyday activities? Well, the Chinese have an even more invasive surveillance system… Want to break up Facebook? Its toughest challenger since Snapchat, the beloved new social-media app TikTok, is owned by a Chinese company… Worried about the breakneck developments in AI and their deployment across the national-security apparatus? But the Chinese. But the Chinese! But the Chinese!?... American power players love nothing more than a hegemonic challenge to catalyze and justify their actions.”
Alexis C. Madrigal, The Atlantic

“As smartphones and their related technologies become more and more ubiquitous, consumers and citizens need more options to access, use, and reuse them. Perhaps that means downloading software from app stores controlled solely by Apple and Google shouldn't be the only option. Huawei may be feeling the pain for now, but the trouble with centralized control is that, eventually, the problem is going to extend to all of us.”
Navneet Alang, The Week

Others argue that “Biden was almost the only one on the stage who talked like a normal person. There was a point near the end of the debate when he was talking about getting men involved in stopping domestic violence and he said that we need to keep ‘punching’ at it… I knew that the twitterati and the analysts would tut tut. Ol’ Joe is just out of touch! He doesn’t know you can’t use words like that. Meanwhile, every non-political junkie watching the debate thought there was nothing wrong with this. Biden was just using ordinary language, not worrying too much if it was fully approved by the woke brigade.”
Kevin Drum, Mother Jones

From the Right

The right supports taking action against Huawei, arguing that its connections to the Chinese state represent a national security risk.

From the Right

The right supports taking action against Huawei, arguing that its connections to the Chinese state represent a national security risk.

“Whatever else can and undoubtedly will be said about the move, it represents for the first time a direct strike at the heart of Beijing’s telecoms/information technology maze of mercantilist protection. Critics who have argued (correctly) that the president’s scatter-shot tariffs on China are inefficient and self-destructive should at least applaud this more targeted move…  at least in this instance and for the moment — the Trump administration has finally targeted a core element of the Chinese state-directed tech leviathan.”
Claude Barfield, American Enterprise Institute

“The Chinese… have stolen billions (trillions?) in technology trade secrets. They are building military-capable ports in the Middle East and in Central and South America. The blacklisting of Huawei is the first real step I’ve seen to stand against China’s onslaught against us.”
Steve Berman, The Resurgent

“It’s important to understand that the next generation of wireless networks is about more than faster load times for your grumpy cat GIFs. 5G will be the backbone of the world economy. Everything from heart monitors to self-driving cars will rely on it. One U.S. national security official told me that China would be able to bring U.S. cities to a standstill ‘with the push of a button’ if American cell towers were outfitted with Huawei equipment…

“America’s spies and generals have long warned that Huawei is an arm of the People’s Liberation Army. Its routers and circuits are the equivalent of wiretaps for a powerful adversary. Last month, [it was] reported that Vodafone Group Plc found these kinds of backdoors in Huawei equipment in 2011 and 2012, providing some of the first public verification to the warnings of the U.S. intelligence community… The key task now is for President Donald Trump and his administration to stick with the Huawei ban, no matter what happens in trade talks.”
Eli Lake, Bloomberg

The real beauty of this action is how it guts Xi and Huawei's central narrative. Namely, their claim that Huawei is self-sufficient and able to provide a rival service to U.S. competitors. We're about to see that claim tested. And I'm confident Huawei will end up red-faced… For too long Huawei has been able to play its way to market power and espionage ability. China hopes to persuade other nations to let Huawei keep spying, but American leadership is establishing ever more impenetrable roadblocks. Trump deserves much credit for his China policy. Google wouldn't have done this by itself.”
Tom Rogan, Washington Examiner

Minority View: “Anathematizing Chinese companies simply for being Chinese would cripple the world economy… If U.S. telecom companies and network managers are worried about Huawei, they should ask to see the company’s software source codes. If consumers interpret the continual patter of software upgrades as a threat to privacy, Washington should assign the role of managing them to domestic telecommunications companies… Huawei isn’t a problem. It’s an opportunity to revitalize the U.S. economy and enhance its digital infrastructure. The U.S. should embrace Huawei as a triumph of the American-led system rather than push it into the arms of Chinese hard-liners who revel in autarkic dreams.”
George Gilder, Wall Street Journal

Here’s the big-picture question behind the current cyber battles: If innovation and superiority in smart industries define global economic prowess, can a country that limits its population’s access to the internet win?... It’s no longer guaranteed [that the next big thing will] come from America or other innovative free societies like Europe, South Korea or Israel. But let’s hope it does. Because if a regime like ­today’s China dominates the industries of the future, well, winter is coming.”
Benny Avni, New York Post

Others note, “I’d hate to be a Democratic member of Congress trying to convince Joe Sixpack that this is a whole new ballgame. The transcript shows Trump being Trump and Ukrainian president Volodymyr Zelensky trying to ingratiate himself with the big dog by, for instance, mentioning that he stays at Trump hotels. Trump’s conversation is typically scattershot, wandering all over the field, leaving a reasonable listener puzzled about what the takeaways are supposed to be…

“I think Joe Sixpack’s response is going to be a hearty shrug. After all that has emerged about Trump so far, his approval rating is closely tracking Obama’s approval at the same point in his presidency. To get Mr. Sixpack’s attention you are going to have to do better than this.”
Kyle Smith, National Review

President Trump should be happy. As much as Warren is articulate, obviously intelligent, and energetically supported by Democrats, she would also be far easier to defeat than Joe Biden… Considering Trump's economy, the president is well placed to defeat Warren.”
Tom Rogan, Washington Examiner

A libertarian's take

“After adding in the ultra-millionaire’s tax and factoring in the other capital taxes Warren wants to levy — on financial transactions, on unrealized capital gains, on corporations — we’d be asking every billionaire to hand over more than two-thirds of their total wealth over a 10-year period. If the government actually managed to collect it, their fortunes would rapidly erode — and so would tax collections. The plan might be a good way to smash wealth, but it’s a terrible way to fund the nation’s health-care system…

“If Warren makes it to the White House, and tries to pass a plan, the Congressional Budget Office will eventually attach more reasonable numbers, with more defensible assumptions, sparking an even more spectacular political blowback than the one that greeted Friday’s announcement. Outside of the progressive Twitterati, there isn’t necessarily an enormous constituency for spending $20.5 trillion to herd every American into a national health insurance program; there would be even less support for spending what Warren’s plan would actually cost.”
Megan McArdle, Washington Post

On the bright side...

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