By: Bryan Harris
We all know about the tech giants for smartphones such as Apple, Samsung, and Microsoft which are featured in our everyday lives to help us connect to each other. However, there is another tech giant that we may have never heard of before that is caught up in a legal and political battle here in the United States. This company is the second largest in the world, yet many Americans have never heard of it before. This company is called Huawei and it is based out of China. Huawei itself has had $93 billion in sales in 2018, which is similar to what Microsoft earned over the same period. Huawei was looking to enter into the United States market earlier this year with their phones using carriers including Verizon and AT&T, however those deals have fallen through after immense pressure from the U.S. government. Huawei is also a large player in trying to develop the 5G network. 5G is the fifth generation of wireless technology and will be able to have greater speed to move more data, be more responsive, and allow for more devices to connect at one time. It is in the early days of development at this point and will be a technology that is more widespread in the 2020s.
Huawei has long been a global player in the smartphone race to many different places over the years. They have not been without controversy as they have become a global powerhouse in the smartphone race. Throughout the years they have been accused by many different countries and unions of anything from hacking by the African Union to espionage by former CIA Directors. The first issue with Huawei occurred when their Chief Financial Officer was arrested in Canada for violating the U.S. trade sanctions by shipping Huawei items from the U.S. to Iran.
One of the big issues with Huawei that has been apparent in their attempt to enter into the U.S. market is that they are seen as acting as a front for the Chinese government to spy on other countries and to subsequently have China become a worldwide leader in technology by 2025 (a stated goal of the Chinese government. The reason that Huawei is seen as being a front for the Chinese government, or the Chinese government having significant influence on the company, is the fact that shareholders within the company need to report the shares that they own to a trade union committee, which reports to the All-China Federation of Trade Unions, which is controlled by the Communist Party of China. Thus, with the shareholders ultimately, though indirectly, reporting to the leading party in China, there is significant influence the government can impose on the company. They have conducted corporate and industrial espionage, and have ignored sanctions, ignored other nations’ laws, and have paid out bribes to others.
The U.S. government has also added Huawei to a list of companies that there is special approval needed to do business with. Earlier this year, President Trump issued an executive order which would create a process that can ban the use of technology from companies that are deemed to be a national security risk. However, after meeting with the Chinese President, Xi Jinping at the G20 summit, it was announced that President Trump would release the restrictions that were included in the executive order.
More recently however, we have seen that the FCC will stop giving broadband subsidies to companies that do not destroy and get rid of the gear that was made by Huawei and another Chinese company, ZTE. These blockings have the approval from the Attorney General, William Barr, for the national security threat that these companies possess. This ban has also been widely received bipartisan support from those in Congress. Although the FCC, the Attorney General, and other lawmakers have taken a hard stance on the companies for their national security threat, President Trump seems to just be using the bans and restrictions as a bargaining chip in the trade war, as shown by his willingness to ease up on the restrictions after meeting with Chinese President Xi Jinping at the G20 earlier this year. However, the bans that President Trump has now set on Huawei working with U.S. companies have been pushed back to start in February of 2020. Amid all the bans and restrictions, Huawei has maintained that they do not work for the benefit of the Chinese government and would not act in improper ways.
As we approach the time in which President Trump’s bans go into effect and the FCC’s ruling, we will have to see if the hardball stances that have been placed will continue to act in a way for our best interest for national security, or whether those stances will continue to be used as a bargaining chip for the ongoing trade war with China.
Citations
Colin Lecher, Huawei is Getting Three More Months Before US Ban Takes Effect, The Verge(Nov. 18, 2019), https://www.theverge.com/2019/11/18/20970684/huawei-us-ban-delay-trump-china.
Sascha Segan, What Is 5G?, PCMag(Oct. 31, 2019), https://www.pcmag.com/article/345387/what-is-5g.
Shannon Liao, Verizon Won’t Sell Huawei Phones due to US Government Pressure, Report Says, The Verge(Jan. 30, 2018), https://www.theverge.com/2018/1/30/16950122/verizon-refuses-huawei-phone-att-espionage-cybersecurity-fears.
Dave Smith, Here’s Why It’s So Hard to Buy Huawei Devices in the US, Bus. Insider (May 20, 2019), https://www.businessinsider.com/why-huawei-not-sold-in-united-states-2018-12.
Mike Rogers, Huawei is National Security Issue, Not Trade Football for our Leaders, The Hill(June 21, 2019, 12:00 PM), https://thehill.com/opinion/national-security/449711-huawei-is-national-security-issue-not-trade-football-for-our-leaders.
Brandon Baker, Is Huawei a National Security Threat?, Penn Today(July 19, 2019), https://penntoday.upenn.edu/news/why-huawei-national-security-threat.
John Hendel, FCC Votes to Edge Huawei, ZTE out of U.S. Networks, Politico(Nov. 22, 2019), https://www.politico.com/news/2019/11/22/fcc-huawei-zte-subsidies-072901.
Colin Lecher, The FCC Votes to Block Huawei From Billions in Federal Aid, The Verge(Nov. 22, 2019), https://www.theverge.com/2019/11/22/20977703/fcc-vote-huawei-zte-china-funding-federal-aid.
Kelcee Griffis, FCC Eyes Broader Restrictions on Huawei, ZTE Products, Law360(Nov. 22, 2019), https://www.law360.com/technology/articles/1222689/fcc-eyes-broader-restrictions-on-huawei-zte-products.