‘Finish Him!’ US Kills Huawei With Final Tech Ban

The federal government has cut off Huawei’s last sources of technology. Export licenses for chips and other tech components are finished.

“People familiar with the matter” are the secret sources for the news. But nobody’s denying it in Washington. AI, cloud, wi-fi, HPC—not even old 4G chips are getting a license grant now.

And what of the unintended consequences? In today’s SB Blogwatch, we prepare for all-out economic warfare.

Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: Swing Face.

“Splendid Achievement”

What’s the craic? Chavi Mehta, Stephen Nellis, Alexandra Alper, Karen Freifeld, Yew Lun Tian and David Kirton report—“U.S. stops granting export licenses for China’s Huawei”:

“To reflect the Biden administration’s tightening of policy”
One person familiar with the matter said U.S. officials are creating a new formal policy of denial for shipping items to Huawei that would include items below the 5G level, including 4G items, Wifi 6 and 7, artificial intelligence, and high-performance computing and cloud items. … American officials placed Huawei on a trade blacklist in 2019 restricting most U.S. suppliers from shipping goods and technology to the company unless they were granted licenses.
…
Another person said the move was expected to reflect the Biden administration’s tightening of policy on Huawei over the past year. Licenses for 4G chips that could not be used for 5G, which might have been approved earlier, were being denied, the person said.

What will be the result? Hadlee Simons says—“The US has dealt the final blow to Huawei’s phone business”:

“Extremely damaging to Huawei”
The trade ban has resulted in the company losing Google support as well as access to major chip foundries for its high-end in-house processors. [But now] Huawei can’t even use 4G Snapdragon chipsets in its smartphones. What does this mean for the phone division’s future?
…
The loss of 4G chips is extremely damaging to Huawei as the company uses 4G versions of Snapdragon chipsets in its recent offerings like the Mate 50 series and P50 series. Losing this option means the Chinese brand doesn’t seem to have any viable flagship silicon at its disposal, as Huawei is also barred from using chip foundries like TSMC and Samsung. [It] suggests that Huawei’s phone business might be out for the count.

Will it have the desired effect? roenxi thinks not:

“If the Chinese Communist Party does something stupid”
I dunno—you look at what China has accomplished the last 30 years and I struggle to see this being effective in the mid- to long-term. Economics has a funny way of favouring people who are more willing to let the market work.

The US government is sitting more in the passengers seat here than the short term policy power they have suggests. The Chinese will only do badly here if the Chinese Communist Party does something stupid (so, to be fair, there are reasonable odds that they will disembowel their own tech industry in a few years).

But why is Huawei special? What about all the other Chinese brands, such as Xiaomi or Oppo? CasualAdventurer is non-partisan:

Huawei has ties to China’s version of the CIA and their tech has been proven to be used to spy on our government—like fitness trackers used to map the Pentagon, for example. Trump was right to act against them, and now that Biden is acting along the same lines we can finally get bipartisan support for treating China as the enemy they are.

Are you sure about that? FerociousLabRetriever is:

“Brutal hostage diplomacy”
Huawei is alleged to have deep links to the Chinese military and ruling CCP, although it might be helpful if governments revealed some of the details to support these unusual tactics. … I’m sure they’ll cite national security reasons for their lack of information sharing.
…
When Canada arrested Meng Wanzhou [the] CFO of Huawei … at the request of the US government … it created a deep freeze in relations: … The CCP also responded with hostage diplomacy, where the CCP held two Canadians in solitary confinement on trumped up charges without consular access and put them through sham trials. Once Canada released Meng … the two Canadians were immediately released.
…
It was a case of brutal hostage diplomacy. … The treatment of the two Canadians was disgusting. … It would suggest Huawei’s CFO is no ordinary corporate executive. … It speaks volumes if the CCP was willing to freeze relations with a G7 country and engage in hostage diplomacy. … Her father is so enormously powerful and close to the CCP’s inner circle, perhaps Xi Jinping himself, that China was willing go nuclear, diplomatically speaking.

What does the Chinese Communist Party want from Huawei? ZipNada explains:

Huawei has engaged in various forms of criminal activity and IP theft. US intelligence agencies have warned about Huawei of spying for the Chinese government for years.

Also, Huawei was doing its own sanctions busting. As android_alpaca reminds us:

Huawei was … dealing with North Korea [and] Iran. … This was done via Skycom, an independent third-party company—but it became clear that Skycom was just a shell company/front for Huawei, as the Skycom’s website domain contact was [email protected]

However, martinusher thinks it’s more about pure commerce:

China’s had a bit of recent problem with colonialism but this is all behind them now. The actual society … dates back some 5,000 years, so leads to a rather different perspective on long term policy.
…
I’d be extremely surprised if Huawei and everyone else in China including the government didn’t see this coming. The conclusion that they’ll draw is that if you’re successful and in danger of beating the US at what it thinks is its rightful game then you’re going to be in trouble.

Meanwhile, mark Mark Thoughts’ thoughts: [You’re fired—Ed.]

This has nothing to do with national security and everything to do with market intervention.

And Finally: