America trumps Huawei for ‘threats to security’

Washington fired last week a long anticipated “nuclear option” in its worsening trade war with Beijing. President Donald Trump forbade US firms from selling any more software and hardware to Chinese tech titan Huawei. Since a sixth of its components are sourced from America, that largest Chinese maker of mobiles and network gear is expected to hurt. It will be felt worldwide. In the Philippines, Huawei supplies all telecom companies and has growing business with the government.

Three American giants began complying Monday with the White House ban. Google halted licensing to Huawei its proprietary mobile operating system Android. Although Huawei uses free open-source Android on phones in China, it bundles Google’s search and Gmail services with tens of millions of units sold overseas, The Economist noted. Intel and Qualcomm stopped supplying parts and designs for Huawei’s phones and network systems. It is unclear how long Huawei stockpile of those parts will last.

Closely being observed is if Huawei’s Asian suppliers will bend to Trump’s wishes. US export laws bar sales of American technology by American firms and foreign partners. One such is Taiwan Semiconductor Manufacturing Company. TMSC, Huawei’s biggest product assembler overseas, heavily depends on US contracts. If it caves in, so will other Huawei friends.

Huawei chairman Ren Zhengfei said last weekend they had prepared years ahead for the US supply shutoff. Still he forecast a 20-percent slowdown in 2019, from last year’s 20-percent sales growth to $102 billion.

Trump’s beef with Huawei is over security. The US government has accused it of selling to Iran hardware it had fabricated with American components. That caused the arrest in Vancouver last December of Huawei CFO Meng Wanzhou on a US warrant. The daughter of chairman Ren, Meng is in house confinement while fighting extradition to the US. Huawei’s main competitor in China, ZTE, came to the brink of bankruptcy from a similar ban on American supplies in mid-2018. ZTE purportedly had sold equipment to Iran too. On personal appeal of Chinese president Xi Jinping, Trump lifted the sanction, but the US government fined ZTE $1 billion just the same.

Since 2018 Trump has been cajoling allies to ban Huawei for their own security’s sake. Allegedly the firm lets Beijing’s communist leaders use its equipment to spy on other governments. Only Australia, among America’s four partners in the Five Eyes signals intelligence pact, has heeded Washington’s request. Last August, Canberra barred Huawei from participating in Australia’s buildup of 5G (fifth-generation) telecoms network. Britain, Canada, and New Zealand have only limited Huawei business dealings. So have other US pals France, Germany, and Japan. All demanded details of Huawei’s supposed eavesdropping and spyware. Trump then issued the ban on US supplies to Huawei.

Australia’s ban was not specific on Huawei and ZTE. Its spy chief, director general for signals Mike Burgess, warned of “high-risk vendor equipment” in 5G technology, in which Huawei is the world leader. At risk would be the country’s electricity grid, water supply, health systems, even driverless cars, he reported to parliament.

In the Philippines Huawei equipment has hastened the expansion of telecommunications services. The government recently contracted a Chinese company to build with Huawei an urban anti-crime network. For P20 billion China International Telecommunication and Construction Corp. is to install an initial 12,000 CCTV cameras over 30 months in Metro Manila and Davao City. Covered are streets, public squares, business districts, techno-parks, and trade zones. Included are face and vehicle recognition ware and a Huawei-equipped control and backup data center in Clark Freeport, Pampanga.

During the 2019 national budget hearings Senate President Ralph Recto asked if security implications of the CCTV plan had been studied. The Dept. of Information and Communication Technology said it had not been consulted. The Dept. of Interior and Local Government assured it would erect cyber-firewalls against Chinese hackers. Australia did not trifle with potential threats. “It would be naive to think we can manage the strategic and technological risks,” Burgess had warned about China.

The dilemma of most countries and telecoms firm is in weighing Huawei’s alleged threat to security versus its product superiority. Its instant response to Trump’s sanctions was to stress the high quality yet low price of its wares. Nick Read, CEO of Britain’s largest telco Vodafone, exemplified that thinking when he opposed in April any ban on Huawei. Saying that keeping out Huawei would delay and increase the cost of 5G rollouts, he asked for hard evidence of the firm’s espionage. Yet in 2011 and 2012 Vodafone Italy publicized its discovery of “hidden backdoors” in Huawei equipment that allowed it access to users’ home networks as well as Vodafone’s fixed-line system.

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