How the Trump administration could bungle the Huawei charges
With tensions already high between the U.S. and China, President Trump threw a massive stink bomb into the proceedings this week.
Back in December, Trump and Chinese President Xi Jinping announced a three-month halt to the burgeoning trade war between the two countries. Teams from the two sides were scheduled to meet Wednesday to continue talks. Then on Monday, Trump's Justice Department lowered the boom: Twenty-three indictments against the Chinese corporation Huawei, accusing it of conspiring to steal technology from T-Mobile and to violate sanctions on trade with Iran. Huawei, for its part, denied the allegations.
The charges may very well have merit. But they could also go down as a case study of how the Trump White House trips itself up, even when it's probably doing something right.
Huawei may not be a household name in America, but it's actually the world's biggest supplier of telecommunications equipment and one of the biggest cellphone manufacturers. It's also a global leader in 5G — the latest technology in ultra-fast wireless networks that's being rolled out in countries around the world.
In fact, here in the U.S., the company is already under a cloud of suspicion for precisely this reason. China is arguably America's number one geopolitical rival. And while Huawei isn't actually state-owned (unlike a lot of major Chinese companies) American lawmakers on both sides of the aisle are worried it would be a security risk to allow a major Chinese firm to intimately participate in building America's own 5G network.
You might recall an odd episode back in mid-2018, when Trump suddenly lifted sanctions on another Chinese communications firm, ZTE, that was charged with violating bans on trade with Iran and North Korea and with violating an earlier settlement. A bipartisan group of senators tried unsuccessfully to get the sanctions against ZTE reinstated. But they were able to ban the U.S. government from doing any business with ZTE.
Notably, the senators threw a ban on federal agencies doing any business with Huawei into the mix as well. In fact, both companies were the subjects of a 2012 House Intelligence Committee report on espionage and security threats.
Other countries are also weary of Huawei: A company executive was recently arrested in Poland for allegedly spying for China. Australia and New Zealand have banned Huawei from supplying them with 5G technology. Germany and other European countries may soon issue restrictions of their own.
That all gets us back to the Justice Department's charges, which certainly get to the question of whether the company is trustworthy.
Huawei allegedly incentivized its own employees to make off with trade secrets about T-Mobile's phone-testing technology and then tried to mislead authorities when T-Mobile sued. (That civil suit was settled in 2017.) The company also allegedly used a subsidiary to trick four major banks into clearing transactions with Iran, in an echo of the ZTE affair. Finally, the charges specifically implicated Huawei's chief financial officer, Meng Wanzhou, who was arrested in Canada in December.
That last bit is particularly important for our purposes.
When Meng was first detained, Reuters asked Trump if he intended to intervene in the case. "Whatever's good for this country, I would do," he replied. "If I think it's good for what will be certainly the largest trade deal ever made — which is a very important thing — what's good for national security — I would certainly intervene if I thought it was necessary."
From the beginning, the Trump has been dogged by suspicions that he would happily use the powers of the presidency as inappropriate leverage in disputes. There's the ongoing saga of foreign diplomats making a big show of staying at Trump's hotels. Then, when the Trump administration tried to flex its antitrust enforcement muscles and squash a merger between Time Warner and AT&T, it was hit with accusations that it was just trying to punish Time Warner for its subsidiary CNN's coverage of the president.
Even without Trump's December pontification on Meng, there would be suspicions that the charges against Huawei and its CFO were just intimidation tactics, meant to browbeat the Chinese into a more U.S.-friendly trade deal. That Trump more or less said he'd happily use Meng as a bargaining chip just opens the doors wide to accusations of bad faith.
The Chinese, for their part, eagerly stepped through that opening. "For some time now, the United States has deployed its state power to smear and crack down on targeted Chinese companies in an attempt to kill their normal and legal business operations," Geng Shuang, China's Foreign Ministry spokesman, said on Tuesday. He added that he believes the indictments against Huawei involved "strong political motives and manipulation." Hu Xijin, the editor of a Chinese state-run tabloid called the Global Times, declared that, "The U.S. indictment against Huawei is like putting legal lipstick to a pig of political suppression."
To make matters worse, Canada has been dragged into the mess as well. The U.S. formally asked Canada to extradite Meng, and the Canadian justice minister has less than 30 days to decide if he'll comply. (If he does, Meng's case would go to the British Columbia Supreme Court, which could take a while to make its own judgment.) Last week, Canada's then-ambassador to China, John McCallum, said that Meng had an argument against extradition, in part due to "political involvement by comments from Donald Trump in her case." The statement sparked enough uproar that Prime Minister Justin Trudeau promptly fired McCallum.
To top it off, several Canadians were arrested in China shortly after Meng was detained, and one of them has been sentenced to death on drug charges.
Other members of the Trump administration are desperately trying to walk things back. "This is a criminal justice matter. It is totally separate from anything I work on or anything that trade policy people in the administration work on," U.S. Trade Representative Robert Lighthizer said in December.
But at this point, it looks like China is trying to strong-arm Canada even as Trump tries to strong-arm China. And no matter what Canada decides to do, it will look like it's picking sides in an ugly geopolitical dispute. And we have Trump's flippancy to thank for it all.