US Huawei blacklist revealed to be pointless

Despite being on a US export blacklist, Chinese telecoms giant Huawei has apparently been able to buy billions of dollars of US technology.

When then President Donald Trump issued one of his executive orders, which attempted to prevent almost any commercial interaction between US companies and a host of Chinese ones, it inevitably caused lots of problems. Chief among them, from an American perspective, was that lots of US companies faced a heavy commercial hit as a result of the ban. The blacklist edict offered some wriggle room in the form of special licenses but it was unclear how easy it would be to acquire one.

Now, thanks a to a report from Reuters, we seem to have an answer. It got hold of some documents released by the U.S. House of Representatives Foreign Affairs committee, which reveal that in the six months starting November 2020 US exporters were granted 113 export licenses to flog $61 billion worth of stuff to Huawei. Chinese chipmaker SMIC also benefited from a similar level of concessions.

The motivation for the House to release these documents is unclear but doubtless there’s some kind of political chicanery involved. For the rest of us it serves mainly to illustrate how clumsy and flawed such pieces of top-down political engineering are. The modern world is infinitesimally interconnected and complex, so the law of unintended consequences ensures such efforts often do more harm than good, even to the putative beneficiaries.

Hopefully a positive consequence of this revelation will be the understanding that geopolitical grandstanding is counterproductive. It’s possible that Trump’s war on Huawei did serve notice to the Chinese Communist Party that the US is drawing a line in the sand with respect to suspected excessive intimacy between the public and private sector over there, but it was at best symbolic. In practice, trade will always find a way and future geopolitical policy should be made with that in mind.

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