Trump Pressured by Congress to Stay Tough on Huawei in Xi Summit
(Bloomberg) -- President Donald Trump faces growing bipartisan pressure in Congress to maintain a hard line on Huawei Technologies Co. rather than ease restrictions on the telecom company to cut a trade deal later this week with Chinese leader Xi Jinping.
The Commerce Department last month put Huawei and more than 60 of its subsidiaries on its entity list, meaning American companies have to obtain a special license to sell components to the Shenzhen-based company -- and requests for such licenses are seldom approved. The president has also signed an executive order restricting Huawei’s presence in U.S. networks.
Trump said last week that he had a “very good telephone conversation” with President Xi Jinping and said talks will resume before the two meet later this week at the G-20 summit in Osaka, Japan. It’s not clear if Huawei was part of their call, but it’s an issue Trump himself has said could be on the table. Senate Minority Leader Chuck Schumer is among those calling for a firm hand.
“Chinese telecom companies like Huawei and ZTE present a national security risk. That’s why Congress banned U.S. government agencies and contractors from using Huawei technology,” Schumer said in a statement. “President Trump needs to make it crystal clear to China that the United States takes this threat seriously and not use our national security as a bargaining chip.”
A look at China’s recent rhetoric illustrates the importance its leaders attach to the issue. When trade talks collapsed last month, the U.S. imposed higher tariffs on China and threatened more. Beijing’s response was measured: A tit-for-tat increase in duties. But nationalistic rhetoric skyrocketed after the U.S. announced days later it would add Huawei to an export blacklist that would cut it off from American suppliers.
The president last year reversed a similar ban on Huawei’s rival ZTE Corp. at Xi’s request. Getting that kind of result now would be significant for Xi because the company is exponentially more important than ZTE, said Samm Sacks, Cybersecurity Policy and China Digital Economy Fellow at New America.
“It’s not just because of the sheer scale of its global reach, but symbolically it represents everything that the Xi administration aspires for China to be a cyber superpower,” she said. “Beijing is not going to make concessions while there’s a public gun to Huawei.”
Shortly after describing the company as a “very dangerous” threat to American national security, Trump said he’d be willing to include the issue in a trade deal. He made similar comments late last year when asked whether he’d release Huawei’s chief financial officer Meng Wanzhou, whose arrest was ordered by his administration because she repeatedly violated U.S. sanctions, for a better trade deal.
Scott Kennedy, China expert at the Center for Strategic and International Studies, said the expectation that Huawei could be traded away stems from Trump’s words and actions that have repeatedly blurred the boundary between commercial and national security goals.
“The only real solution is to re-build the boundary and not cross it again," he said. "Otherwise, there will always be a legitimate concern about swapping commercial gains for national security needs.”
In recent weeks, public statements and legislative action by China hawks in Congress has increased, setting the scene for a tense, high-stakes meeting in which they urge Trump to hold the line.
Senators Marco Rubio and Mark Warner -- both members of the Intelligence Committee -- this month sent a letter to U.S. Trade Representative Robert Lighthizer and Secretary of State Mike Pompeo, warning them against using Huawei as a bargaining chip. One person briefed on Trump’s reaction said the president was unhappy lawmakers were interfering with his negotiations.
While the politics of taking action to save Huawei are complicated, removing it from the export blacklist isn’t, says Bill Reinsch, who led the bureau in charge of export sanctions in the Clinton administration.
Adding and removing companies is not a legal proceeding. But because placement on the list is due to suspicions the entity is doing things contrary to U.S. security interests, removal from the list without some evidence of innocence would be controversial, particularly among security hardliners, Reinsch added.
Still, it’s not clear whether Congress would find enough support to take binding action that forces the president’s hand on the issue. It would take legislation passed by a veto-proof majority because Trump would most likely veto it, and that amount of support is unlikely, Reinsch said.
In a shot across the bow, Utah Senator Mitt Romney last week introduced an amendment to the National Defense Authorization Act that would limit Trump’s ability to remove Huawei from the blacklist. It’s too soon to tell if the amendment will be voted on as part of the bill and how much support it can get.
American companies that are blocked from selling to Huawei are lobbying the government for relief by emphasizing the impact on their business and viability, people familiar with the matter said.
It’s ultimately up to Trump whether he will side with the security hardliners or bow to pressure from the business community, Sacks said. “It’s unclear how he threads this needle, and if it’s even possible.”
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