US partially lifts ban on Huawei following extensive lobbying campaign

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Lobbying efforts by several telecommunications corporations may have paid off following President Donald Trump’s negotiated ceasefire with China over trade alongside last week’s G20 conference.

On May 15, Trump banned telecommunications giant Huawei from doing business in the U.S. as the trade war with China ramped up and the U.S. attempted to extradite Huawei’s CFO from Canada on fraud charges. The Trump administration cited national security concerns, based on the premise that the Chinese government could use Huawei as a way to spy on the U.S. The concerns were driven in part by the race to expand 5G wireless network infrastructure, a sub-sector where Huawei is an industry leader.

U.S. chip makers, which did an estimated $11 billion worth of business with Huawei last year, including Qualcomm and Intel, reacted by deploying lobbyists to federal agencies and Capitol Hill in an attempt to receive exceptions to the President’s order.

The result was a more targeted approach by the administration to restrict Huawei’s supply chain, specifically targeting its 5G sub-sector rather than its consumer cell phone manufacturing. 

Qualcomm spent $2.4 million in lobbying so far in 2019 and $8.1 million throughout 2018. Intel spent $1.4 million and $4 million respectively. Both lobbied Congress heavily as well as the Treasury Department, the Commerce Department, the White House and the U.S. trade representative. Google parent company Alphabet, also in Huawei’s supply chain, spent a massive $21.5 million on lobbying in 2018 and $3.6 million so far this year.

Huawei itself also is directly involved in trying to sway U.S. opinion. In March, the company publicly disclosed under the Foreign Agents Registration Act that it hired two public relations firms, Racepoint Global and Burson Cohn and Wolfe, to spearhead an influence campaign. Huawei is still paying Racepoint $55,000 per month and gave Burson Cohn and Wolfe a $160,000 budget.  

After President Trump and Chinese President Xi Jin Ping declared a trade truce last week, U.S. companies will now be able to sell high-tech equipment to Huawei. The ban on goods would be limited to those related to national security. This would likely include network hardware specifically related to 5G, which was one of the main targets of the administration’s hardware ban in the first place.Members of Congress from both sides of the aisle weren’t thrilled about Trump’s concessions to reignite the trade talks. Even close allies like Sen. Lindsey Graham (R-S.C.) claimed it would take significant efforts to reimplement the restrictions on Huawei should the administration want to again ratchet up pressure on China.

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