The Huawei dilemma: Washington still stuck trying to balance national security against US tech supremacy

The Trump administration declared war last year against Chinese technology firms, all in the name of US national security.

But in the many months that have followed, Washington is doing more head-scratching than regulating. It turns out that protecting the US telecoms infrastructure from foreign threats is a lot harder – and more complicated – than expected, especially when it pits that priority against the competing objective of maintaining the US’ technological pre-eminence.

In May, US President Donald Trump signed an executive order to prohibit US infrastructure from using Chinese products and services. But the Commerce Department has yet to complete the detailed regulations. The deadline of October 12 has come and gone, with no sign when those regulations will be published.

“There is a struggle within the US government to develop and implement expanded export control policies,” said Harry Clark, who leads Orrick, Herrington & Sutcliffe’s international trade & compliance team advising some US suppliers to Huawei Technologies. In all, American firms make more than US$14 billion in sales of semiconductor chips and other components to the Chinese telecommunications giant.

“It is difficult for the government to decide which technologies should be restricted when the technologies are obscure and evolving so quickly. These decisions can be momentous, potentially shutting US companies out of supply chains.”

As technology has become the most contentious aspect of the US-China relationship, the race to dominate next-generation technologies – 5G networks, robotics and artificial intelligence – has become critical for the US to maintain its global leadership.