The Right Way to Deal With Huawei

The United States Needs to Compete With Chinese Firms, Not Just Ban Them

Workers sit at the Huawei stand at the Mobile Expo in Bangkok, Thailand, May 2019 Jorge Silva / REUTERS

Over the past year and a half, the Trump administration has waged an extraordinary campaign against Huawei, the Chinese telecommunications giant, involving criminal indictments, trade sanctions, and diplomatic pressure on U.S. friends and allies. In May, the administration raised the stakes even further. President Donald Trump signed an executive order blocking U.S. businesses from using equipment and services made by companies controlled by “adversary governments.” Although the order did not name Huawei or China, it was clearly aimed straight at them.

The same day that Trump signed the order, the Commerce Department placed Huawei and 68 of its affiliates on a list of firms to which U.S. companies may not sell components without government approval. Huawei will suffer even more serious consequences from its inclusion on this list than it will from the executive order. Four major U.S. technology companies—Broadcom, Intel, Qualcomm, and Xilinx—almost immediately stopped working with Huawei, and Google announced that it would no longer provide the Android mobile operating system to Huawei smartphones. Although the Commerce Department later suspended the ban for 90 days, Huawei’s future remains uncertain. At an event at the company’s headquarters in Shenzhen, Huawei’s founder, Ren Zhengfei, said he expected revenues to decline by $30 billion over the next two years because of U.S. actions, down from an annual $107 billion in 2018.

Huawei does pose a threat to U.S. security, but that is not the only reason for Washington’s assault on the company. Rather, the moves are a gambit in a larger battle over the future of the digital world. U.S. Secretary of State Mike Pompeo said as much in a May 2019 speech in London, where he warned his hosts that using Huawei technology in British 5G networks could allow China not only to access valuable data but also “to control the Internet of the future” and possibly “to divide Western alliances through bits and bytes.”

The White House is right to focus on technological

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