United States intensifies its offensive against Huawei

Enrique Dans
Enrique Dans

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Arresting the senior executives of a company is a tactic governments use to apply pressure in conflicts. Sending the police to arrest somebody because of their relationship with a company, their professional activity, is exaggerating a conflict using a justification that, at this moment, seems anything but justified. Taking that step with respect to no less a person than the daughter of the company’s founder and forcing her to spend time in a foreign prison awaiting trial for extradition is a gesture that goes much further, and that the administration of Donald Trump will have to justify with very powerful arguments if it wants to hold onto the little prestige it still has internationally.

So far, all the reasons the United States has cited in its ongoing conflict with Huawei, all the pressure it is applying to its allies and to those countries where it has military bases, are based on a 2012 Congressional report totally lacking in evidence and simply based on unproven suspicions that have been refuted by the company, but that has affected a global company that works with governments and companies that carry out rigorous research before making decisions that, in most cases, affect strategic decisions about their future.

Huawei has been subject to careful scrutiny by companies and governments around the world, and all they have discovered before buying its products is that it has invested more than any other company in I + D technology, giving it more patents than any other in areas as crucial as 5G, and which is also very competitive in terms of quality and price. For any country, blocking Huawei products usually means accepting a more expensive and slower 5G roll out, which makes little sense. Obviously, I can’t say with certainty that Meng Wanzhou has committed any kind of crime or has violated the US trade embargo with Iran, but moving from suspicions of economic crimes to arresting somebody on international soil is an outrageous escalation of a sideshow in Washington’s trade war to dominate the future of 5G technology.

Huawei so far has simply acknowledged the provisional detention, arbitrary and without specific charges, during a transfer at an airport, and that it has been unable to obtain any information with respect to the charges against Meng. The scant information available points to alleged violations of an embargo with Iran after the US reimposed economic sanctions against Iran that were lifted under a 2015 nuclear accord, implying that the United States is arresting someone not for violating an international trade agreement, but for its own sanctions: in other words, arresting the daughter of the founder of a company that apparently complies with all laws and regulations applicable in the countries in which it operates, including the laws and regulations that apply to the control and sanction of exports.

The United States is clearly frustrated that it is losing the race for control of 5G. But to start making threats and arresting people is taking things to a new level, and seems hard to justify.

(En español, aquí)

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Enrique Dans
Enrique Dans

Professor of Innovation at IE Business School and blogger (in English here and in Spanish at enriquedans.com)