The US war on Huawei not only reeks of double standards but is also killing the free market

“We live in interesting times,” said US senator Robert F Kennedy in a speech in 1966, alluding to the apocryphal Chinese curse, “May you live in interesting times”.

Today’s interesting times do not just encompass the trade war but also a Chinese company, which now joins the likes of Iran and North Korea on the US’ list of its top enemies.

Huawei became America’s boogeyman not only because of its emerging leadership in the global telecommunications industry, especially in 5G technology, but also because of US intelligence agencies’ dread of its possible connections to the Chinese government and the Communist Party.

The Huawei saga culminated two weeks ago in US President Donald Trump’s executive order barring the use of foreign-made telecommunications equipment that might harm US national security, followed by the Department of Commerce’s decision to add the Chinese giant to the “Entity List”, which restricts the sale of US equipment and software to it.

It didn’t take long for the onslaught against Huawei to begin: Google cut off Huawei’s Android licence, Intel and Qualcomm suspended their sales to the company and even non-US companies, like chip designer ARM, froze their business ties with it.

While this could have left Huawei stranded without an operating system and enough microchips, the Chinese company had acquired stockpiles of microchips anticipating a possible crackdown, similar to the one against ZTE, and is relying for the moment on the open-source Android system.

Moreover, in 2012, Huawei started to develop its own operating system to replace the Android system, code-named Hong Meng, which some reports say will be ready for use domestically in the last quarter of this year and globally by the spring of 2020. Its success is not assured, especially given past failed attempts by Chinese companies and organisations to create their own operating systems.

Meanwhile, the US showed some mercy, granting Huawei a 90-day reprieve that will enable the company’s partners to provide updates until August 19.

While Huawei is the main victim of the Trump administration’s actions, they could also have critical implications for the US and the world. The US sees Huawei as a possible geopolitical pawn in a future US-China confrontation.

The main fear surrounding the company is that one day, and especially in case of a conflict, the company might provide the Chinese military or its intelligence services special access to its equipment and data.

To back up this claim, Washington stressed that China’s National Intelligence Law forces Chinese citizens to cooperate with the government to protect national security.

However, this is exactly what the US is now doing with Google, for example – it is forcing the American tech giant to act against its wishes and commercials interests to achieve Washington’s political goals.

Thus, the US is saying that Huawei and the Chinese government might one day do what the US has already done: use domestic laws and private American and even non-American companies to further its geopolitical aims.

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From a moral point of view, Washington’s position is hypocritical. From a political point of view, it’s also problematic in the long term, as it sets an alarming precedent.

If the US, the world’s superpower, is using private companies to further its geopolitical objectives, can China be stopped from doing the same in the future? How can Huawei be accused of following the instructions of the Chinese government when US tech giants are doing the same?

In choosing to use private companies in its attack on Huawei, the US is losing the moral high ground and ultimately empowering China.

Former White House chief strategist Steve Bannon recently said that killing Huawei is more important than a trade deal with China. Although he no longer has any executive power, his claims may reflect the position of some officials close to Trump.

But it’s doubtful that the American attack on Huawei will completely cripple the company. Huawei will continue to remain an important global player, serving numerous markets and consumers outside the US.

Over the next decade, other Chinese companies will follow in its footsteps, as the government’s “Made in China 2025” blueprint facilitates the rise of Chinese tech leaders.

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Instead of creating an environment in which the market is separated from the political sphere, the US is setting the stage for Beijing to use these future Chinese giants to achieve its political goals.

Finally, the Trump administration’s actions are antithetical to free-market principles. The act of a government trying to destroy a company out of fear and forcing private businesses to go against their economic interests, irrespective of the economic fallout to their investors, is anything but market liberalism.

While its attack on Huawei could prove efficient, the US has just imitated the Chinese behaviour it so heavily criticised: that of limiting the freedom of its market and companies.

Ultimately, it is consumers, companies and investors worldwide that will suffer the consequences of the US-Huawei and broader US-China conflict.

By not practising what it preaches, the US isn’t fighting China, but admitting that China’s tactics are right and legitimate. The real victim of the Trump administration’s actions isn’t Huawei, but the free market and a just and ethical environment.

It shouldn’t come as a surprise that just a few days after the Huawei ban, Chinese President Xi Jinping visited a rare earths factory, hinting at a possible Chinese response.

China might have used companies for geopolitical goals, but the US is now perfecting the tactic, leading to an alarming spiral of power over principle.

Andreea Brînză is vice-president of the Romanian Institute for the Study of the Asia-Pacific (RISAP). Her research focuses on the geopolitics and geoeconomics of China and especially on the Belt and Road Initiative