US Government Infighting Over New Huawei Sanctions: Report

Huawei US Ban Illustration May 20 2019 AH
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The U.S. government isn't on the same page regarding Huawei, a new report indicates. Mere days after Commerce Secretary Wilbur Ross announced Washington will be cracking down on what remains of Huawei stateside suppliers, Pentagon allegedly stopped that effort in its tracks.

Ross was previously convinced the legislation would be enacted this year. He said as much at this year's World Economic Forum last week.

The initiative revolved around the very laws Washington already utilized to cripple the sale and licensing of American products to Huawei. However, the current framework exempts sales amounting to only a quarter of the final product, or less. Capitol Hill was reportedly looking to raise that threshold to 90%.

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Though Huawei believes in its survival even in the worst-case scenario, not many share that sentiment. As last year's sanctions already crippled its global electronics business, stricter regulations would likely have disastrous effects.

Huawei's current predicament did not manifest overnight. On the contrary, the present state of affairs is merely result of over two decades' worth of issues. The Huawei-Washington standoff isn't helped by the ongoing tensions between the U.S. and China, either.

The world's two largest economies will resume talks in the coming weeks after already toning down their trade war last year. That doesn't necessarily mean good news for Huawei – or any news.

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2020: The year of new sanctions and old problems

Namely, Washington remains adamant the sanctions aimed at Huawei are a matter of national security, not trade policy. The position is an extension of the government's long-standing stance that Huawei poses a major spying risk. The U.S., therefore, has no intention to touch upon the matter in the new round of trade talks with China. Secretary Ross confirmed as much during his visit to the Swiss economic summit earlier this week.

Even though Beijing surely has different ideas, China's current priorities still lie with easing stateside tarrifs on its imports. Because of that, Xi Jinping's administration will likely refrain from making Huawei-related ultimatums in the immediate future.

Naturally, the Shenzen-based behemoth continues to insists it's a victim of political circumstances. Be that as it may, trouble does seem to follow it. Dozens of 21st-century legal clashes with stateside companies and the American government itself can attest to that. It's hence unlikely to find much sympathy in the West, even after Washington hits it with new trade restrictions.

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Huawei CFO, Meng Wanzhou, remains under house arrest in Vancouver. The daughter of the conglomerate's founder, Ren Zhengfei, has been fighting off a U.S. extradition request from Canada since late 2018. The DOJ charged her with financial fraud, alleging she played a key role in circumventing U.S. restrictions on trade with Iran.