I just got off the telephone with a contact I had made at Huawei a couple of months ago at their Shanghai Advanced Intelligence event. I wanted to get his take on how the new Huawei mobile phone and other new hardware is faring.
It is quite odd that the vision of China, here in the United States, is so different than that of the rest of the world. A few columns ago I had a chat with a colleague in the Netherlands. It was quite enlightening and I received a very good picture of what they think of the United States.
In today’s conversation, I gleaned a similar picture of what China thinks of us. And, it varies depending upon whether one talks with the common population or with their tech leaders.
The average Chinese citizen does not think much of the United States at present. That is no surprise, considering what our leaders have been doing to them. At first, in the tech sector, there was quite a bit of worry about losing the “goose that lays the golden egg” – America. However, as time, and the shock of what was going on passed, it became apparent that the Trump Administration was going to stay the course. More reasonable heads in Congress were not going to prevail for the time being. So, the tech sector in China regrouped, marshalled its resources and forged ahead in the changing landscape.
I have discussed this quite thoroughly in past missives – what Huawei is doing on a global scale. Much to the dismay of the Administration, the call for a global ban on buying Huawei equipment, or even selling components to the company, did not work out anywhere close what it imagined.
More proof of how Huawei is adapting is this new Huawei smartphone, the Mate 30 Pro. My, how quickly Huawei managed to source components from sources other than the United States! And, in the last couple of days, Huawei announced it was going to relocate its Silicon Valley business unit to Canada. More lost jobs and I am willing to bet this hardly gets a casual backwards glance from Trump since he is not a fan of Silicon Valley anyway.
Did the powers-that-be in this country really expect Huawei to just shrivel up and go away? Sure, the United States represented a significant market for Huawei, and China in general – both import and export. However, this sans-American hardware smartphone illustrates just how nimble Huawei is in a global market. This is the second product made using international parts suppliers (the first were new 5G base stations that do not contain components from American suppliers. And, they perform 30 percent faster than those with U.S.-made parts). Have we forgotten how industrious the Pacific Rim can be?
The jury is still out on the software side of smartphones. Huawei is developing its own version of Android. How successful that will be is still up for debate. China seems to think it will not be a big deterrent in most of the world but they admit it might be an issue in western markets. Still, it is likely that Google will be back on track with Huawei in the not too distant future. The wild card is, who will be in office in 2020.
And, even if we have another four years of this administration, there are rumblings that the detrimental effects for another four years might, finally, turn enough Trump bobbleheads away from his destructive policies and undo much of this.
It is a global economy. The present administration seems not to understand that. So far, this “we are the champions” mentality has failed, miserably. It also seems the more White House policies fail, the more irritated, hence retributive, the President becomes.
The sad state is that the longer this lasts, the more distance gets put between the United States and the rest of the world, including long-time friends and allies. And, the more the rest of the world is forced to turn away from the United States, the worse it will be; not only for technology, but for world-wide integration of 5G and other technologies.
Wilbur Ross, President Trump’s Secretary of Commerce, is at it again. In another ridiculous attempt to find something that works in the “whatever it is today” of Trump’s China policy whims, Ross has spun a new policy.
It is like a TV soap opera. Nary a week goes by without one of Trump’s subordinates coming up with a new angle on all of this.
The latest is a bunch of rules by which a telecom supplier will be measured. In the usual diatribe, “These rules demonstrate our commitment to securing the digital economy, while also delivering on President Trump’s commitment to our digital infrastructure” notes Ross.
Ho-hum…is anybody listening anymore? Why take any of this seriously when one never knows what is coming next and what direction to pursue.
So, what IS the latest? Well, now the Department of Commerce (DoC) will look at each case individually. That seems to get them off the hook of having to follow the original Executive Order that, essentially, bans entire vendors.
In the last six months, the potential fallout from banning Chinse technology companies, and the ridiculous tariffing of many others, has proven to be a disaster for the United States. Prices have risen, almost across the board. Tech segment’s sales have slumped, and the holiday shopping extravaganza was threatened. However, overall, little has changed, other than a few delays in implementing these policies and orders.
Many of the telecom players have made known their objections to the bans and tariffs. One is the rural broadband telecom segment, which is heavily invested in Huawei hardware. On the exporting side are the semiconductor manufacturers, for whom China was a major buyer as well as factory sites. The semiconductor industry, which has been stagnant for the last couple of years, has had to take another shot on the chin with these White House policies. And Silicon Valley, obviously, is not happy either.
Having the DoC look at each case on an individual basis is laughable. One of the numbers I saw recently, said there were 120+ companies signed up, looking for permission to do business with China. I have not seen any numbers on how many foreign vendors have gotten in line to have their goods assessed for use in the United States. But I have wonder, given the dislike for this Administration, the tariffs and bans, how many are willing to jump thought such hoops for the time being.
If the government is going to do these assessments in true government fashion, by the time they are done with them, we will, probably, have a thriving community on Mars. When has our government ever been competent and efficient at anything like this unless we were at war? Ross’ position is that each case will be given a “lot of thought” and companies whose outcome is less than desirable will be given the opportunity to appeal. That does not sound like a very effectual process to me.
Is this, really, anything new? Or is it just some reiteration of what has already been said ten ways from Sunday. Perhaps Ross thinks we need a bit more explaining.
The funny part is if this is what they are going to do now, what have they been doing since this vector was announced – sitting around on their hands?
I have to feel sorry for U.S. businesses. Obviously, Trump has no clue as to what it takes to “make America great, again.” So far, all he has managed to do is drive up costs, aggravate and insult our allies , alienate the press, further ding the semiconductor industry, and ruin the soybean business. And these are only some of the cases. Had he been allowed to continue to run amuck he would have ruined Christmas this year, as well!
There does not seem to be any type of resolution in the immediate future. There may be a respite for the season, but it will be interesting to see what and, especially, how long, this environment can exist without major ramifications once the new year arrives.
In the end, our allies are tired of this and they are moving on. Nearly universally, our allies have shrugged off following Trump’s ban. And China has moved on. The landscape between China and the U.S. has forever changed, and not necessarily in the United States’ favor.
In the end, chumming up to Russia’s Vladimir Putin and North Korea’s Kim Jong-un should be the sign that this country is not in its best days. Unfortunately, the fallout from this president will follow us long after he is gone.
1. The U.S. government just proposed tariffs of up to 100 percent on a range of French imports, including cheese, champagne and handbags, This, after, announcing Monday it found France’s newly enacted digital service tax to discriminate against U.S. companies. Man, I am going to miss my brie!
Even as the United States attempts to revive trade talks with Beijing, President Donald Trump signed an executive order yesterday securing the information and communications technology and services supply chain, which effectively banned the importation of telecom equipment from Huawei Technologies, although it did not name the Chinese telecom giant.
“President Trump’s decision sends a clear message that the U.S. will do what it takes to secure our communications networks,” FCC Commissioner Brendan Carr. “The Executive Order will help ensure that our foreign adversaries do not compromise the security of our networks or undermine our core values, including our freedom from unlawful surveillance and respect for intellectual property. I look forward to continuing to work with all stakeholders to protect the security of our networks.”
The order was necessary, the president said, because “foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services in order to commit malicious cyber-enabled actions, including economic and industrial espionage against the United States and its people.”
As a result, also on Wednesday, the U.S. Commerce Department added Huawei and 70 affiliates to its “Entity List,” which bans them from buying parts from U.S. companies without government approval.
U.S. Senator Roger Wicker, R-Miss., chairman of the Senate Committee on Commerce, Science, and Transportation, applauded the placement of the Chinese telecom equipment manufacturer on the Entity List.
“This is a necessary step to prevent the use of communications equipment that poses a threat to the United States. As chairman of the Senate Commerce Committee, I stand ready to work with the administration and stakeholders to protect our national security and win the race to 5G,” Wicker said in a prepared text.
Commerce Secretary Wilbur Ross said on Fox News that the move was based on the increased connectivity 5G will bring. “We’re moving into a 5G environment, which will connect everything to everything, the so-called Internet of Things. So as everything becomes interconnected it creates more risk because if someone does something untoward to those systems it could disrupt everything,” he said.
Trump’s executive order said that although an open investment climate is good for the economy, “such openness must be balanced by the need to protect our country against critical national security threats.”