US tech companies reportedly exploit loopholes to work with Huawei

Tense relations between United States and China. Concept of conflict and stress

The US government seems to be losing its battle to suffocate Huawei as its own companies look for ways to keep doing business with it.

This is according to the New York Times, which has spoken to no less than four people who reckon they know what they’re talking about on this matter. They say US companies including Intel and Micron have started selling stuff to Huawei again on the grounds that the products weren’t manufactured in the US.

This is just the latest example of the confusion and contradictions created by trying to ban trade with large multinational companies in the era of globalisation. Yesterday we reported on courier firm FedEx suing the US government for putting undue burden on them to vet every package they handle in case it’s contaminated by and Huaweiness.

The NYT piece sheds light on the Byzantine complexity of the rules being arbitrarily imposed on doing business with Huawei. The ‘entity list’ kept by the Department of Commerce seems to be very badly thought out and implemented and seems to make very little allowing for the difficulties it creates for American companies.

At the core of the problem is the use of trade policy to augment political strategy. The Trump administration essentially seems to be using this entity list to brow-beat China into making concessions on things like trade tariffs, currency manipulation, etc. It might end up being quite effective but US companies are being asked to take on the burden of enforcement, which is both burdensome and costly. Some, it seems, are disinclined to play ball.

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