Will Biden remain "tough" on Huawei?

 

Will the tension with Huawei be changed in the Biden era?

Although the Biden administration has yet to give a definitive answer to this question, the White House and Biden's nominee have recently taken a stand on the issue.

The Biden administration would work to safeguard American telecoms networks from "untrusted vendors" like Huawei Technologies Co Ltd that threaten national security, the White House said, according to Reuters.  

Not only that, on Jan. 26, Joe Biden's commerce secretary, Gina Raimondo, similarly said she wanted to protect U.S. telecom networks from Chinese companies - and it's easy to see from all the previous moves that "Chinese companies " points to Huawei and ZTE.

And, at the same time, on the issue of Huawei's "entity list," Gina Raimondo said, refusing to commit to keeping Huawei on the U.S. economic blacklist overseen by the agency.

 

Huawei may lose the opportunity in the U.S. telecom supply

White House press secretary Jen Psaki said that telecommunications equipment made by untrusted suppliers, including Huawei, poses a threat to the national security of the United States and our allies - similar remarks that were common during the Trump administration, the report noted.

At the same time, Jen Psaki also said, in order to ensure that U.S. telecommunications networks do not use equipment from untrusted vendors, they will work with allies to protect their telecommunications networks and make investments to expand the production of telecommunications equipment from trusted U.S. and allied companies.

Judging from the current attitude of the White House, despite the change of the U.S. President, the attitude towards Huawei in the matter of providing telecommunications services in the United States has not changed.

As early as Nov. 22, 2019, the FCC has banned U.S. wireless carriers in rural areas from using $8.5 billion in federal funding program (Universal Service Funding) funds to purchase equipment and services from two Chinese companies, Huawei and ZTE; it also preliminarily listed Huawei and ZTE as national security threats.

In March 2020, Trump officially signed the "Secure and Trusted Communications Networks Act of 2019", which was passed by both the House and Senate (the FCC passed the bill on Dec. 10, 2020). The bill calls for: prohibiting federal subsidies for the purchase of communications equipment or services that pose a national security risk and establishing a $1 billion reimbursement program to help small, remote telecommunications carriers replace "suspect network equipment," with the goal of providing a strong and secure trusted network environment in the United States.

In June 2020, the FCC announced that it had officially determined that China's Huawei and ZTE posed a threat to U.S. national security.

Notably, during this time, Huawei and ZTE filed appeals, but both were rejected.

Although all of these initiatives were made during the Trump administration, it seems that the government likely to remain tough on Chinese tech like Huawei with more help from allies.

 

There may be a glimmer of hope about the "entity list"

The response to the "entity list" attitude came from Gina Raimondo - who, it should be noted, is not yet the final choice for Commerce Secretary.

In response to a question about whether to maintain the blacklisting of Huawei from the U.S. economy, Gina Raimondo said: "I will review the policy, consult with you, consult with industry, consult with our allies, and assess what's best for American national and economic security".

The previous decisions on Huawei's "entity list" were mostly issued from the U.S. Department of Commerce, and even though Gina Raimondo has not yet been elected, as a Biden nominee, her attitude has some reference significance.

From another point of view, compared to Trump's many banning initiatives during his term of office, and in the international community to gang up to convince other countries to ban Huawei, the response given by Biden is still mild.

Perhaps, for the "mess" left by Trump, the Biden administration has not figured out how to clean up - after all, the implementation of the "entity list" is also a major obstacle which may affect the development of the U.S. semiconductor industry.

According to the International Semiconductor Industry Association (SEMI), the U.S. ban has led to the country's semiconductor industry losses of nearly $ 170 billion (about RMB 1.1 trillion).

In fact, for the U.S. "entity list" ban, the international semiconductor industry associations have been opposed to the attitude.

In a letter to Gina Raimondo, secretary-designate of the U.S. Commerce Department, SEMI President Ajit Manocha said the United States should coordinate with allies whose companies compete in the global market. He also criticized the Trump administration's policy of restricting semiconductor exports to China, which had serious consequences for the U.S. industry. He called on the new Biden administration to quickly quickly approve licenses for U.S. companies to supply mainland companies such as Huawei.

He also pointed out in the letter that the new Biden administration should quickly digest the accumulated licenses for a long time, and if the matter continues to be delayed, it actually represents the new administration's rejection attitude.

The letter criticizes the Trump administration for implementing rules with little public input and no clear overarching policy, and said the "highly unusual process" resulted in unintended consequences.

Meanwhile, one of the effects mentioned is that more and more foreign competitors are not subject to U.S. export controls as an advantage in marketing semiconductor products, in addition, this unilateral trade doctrine also makes U.S. exporters more vulnerable to retaliation from other countries.

Actually, the whole world has been suffering the United States semiconductor hegemony for a long time despite the "entity list" is for China.

In the U.S. crackdown on China's technology industry, other countries or regions in the semiconductor industry also feel the crisis. In order to reduce the dependence on the United States, in December 2020, 17 countries of the European Union signed a plan, announcing that 145 billion euros (about RMB 115,274.5 million) will be invested in the semiconductor industry in the next two to three years.

In general, the Biden administration's attitude toward Huawei and ZTE's provision of telecommunications equipment services in the United States continues the attitude of the Trump administration.

The International Semiconductor Industry Association (ISIA) and Gina Raimondo's statement on the "Entity List" gave a slight turnaround to the matter. The Biden administration's "next move" is a critical one for both Chinese technology companies and the U.S. semiconductor industry.

But it will take some time to answer these matters.

This is an article from WeChat official account Leifengwang (ID: leiphone-sz), written by Xiao Man, translated by Chris Yuan.