Commentary: Should U.S. Vendors Sell Parts to Huawei?

By Mike Fritze

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Huawei has become a poster child for illustrating the growing tensions over China’s efforts to control the worldwide 5G technology market. Concerns about China’s activities in the overall microelectronics and related advanced technology areas have also been widely covered in the recent news.

An executive order in May 2019 on communication technology and supply chain security placed restrictions on the import of communications tech from a potential adversary.

In addition, the Commerce Department put Huawei on the “Entities List,” restricting the export of U.S. technology to Huawei without a government license.

But are these policies effective in protecting the United States?

To start, an important distinction needs to be drawn between import and export of communications technology to a potential adversary. Restricting imports and usage of communications tech from an unfriendly nation is a major step in mitigating the significant risks such equipment poses to domestic systems.

Restricting deployment to “non-critical” parts of the network is not enough to mitigate security concerns for 5G systems, contrary to some U.S. allies’ claims. Due to the low latency demands of this technology, much more processing will be done near the “edges” of the network than ever before.

This potential blurring between the core and peripheries has help drive U.S. concern expressed over the U.K.’s Jan. 28 decision to allow Huawei equipment to be installed into 35 percent of its non-core network.

Introducing tough restrictions on selling chips and gear to an unfriendly nation is another matter altogether. Blocking exports can have a negative impact on the business interests of the U.S. electronics industrial base. Some U.S. firms have argued that Huawei is one of their biggest customers and that an export ban can be detrimental to business.

The commercial electronics industrial base is an important part of overall U.S. economic strength. Policies that harm this industrial base also impact the nation’s defense enterprise which depends on these commercial companies for electronic components.

It is important to remember that the United States defeated the Soviet Union on the economic front without ever having to fight them directly. This was in large part due to the power of our commercial industrial base. A strong industrial infrastructure with compelling market competitiveness are key aspects of U.S. national security.

Restricting importation and deployment of 5G gear from an unfriendly country into key U.S. infrastructure as the recent executive order mandates is simply prudent behavior considering the national security risks. However, a widespread crackdown on exports of electronics chips and gear will have negative unintended consequences. Such policy harms the U.S. industrial base and encourages our adversary to increase its domestic efforts. The Pentagon recognizes this and has recently raised concerns about recent Commerce Department policy.

Addressing U.S. national security concerns surrounding Huawei technology is critical. But resulting policies should not hurt U.S. economic strength via blanket prohibitions on the sale of its technology. A world-leading economy is ultimately the source of U.S. military power. Its policies should take this into account.

Mike Fritze is vice president of the Potomac Institute for Policy Studies.

Topics: Global Defense Market

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