Sanctions Blowback for the Empire

The above cartoon suggests the content of this Global Times article, “US' ban on Huawei eventually boomerangs on itself.” We know how poorly the illegal sanctions laid on Russia and the USSR before it have performed, that they primarily damaged the ones breaking the law in various ways while actually strengthening the target of the sanctions. We recall it was Team Trump and the Obama Swamp before him that decided China was a threat to the Outlaw US Empire, although of course Communist Red China has always been an enemy since it won Independence in 1949. Escalation, however, occurred with Team Trump and Congress who launched a Trade War consisting mostly of tariffs that drove up inflation and mostly hurt American citizens and later the banking industry with the ending of the Zero Interest Rate period. Much of the damage was done through legislation passed by Congress that was cheered and approved by Team Trump. We recall the Lawfare waged via the Canadian proxy that didn’t end well, so another way was needed, and the blowback from what was devised is what the article deals with. IMO, it’s the Tar Baby all again. For those not familiar with that rather old American folk tale, you can read it at the above link (stories 2, 4 & 6 are the ones most associated, but the entire collection is excellent, although the dialect might be hard for some). Here’s the article:

Despite the 2019 National Defense Authorization Act that bars the US government agencies from contracting with any entity using Huawei components, the Pentagon is pushing for an exemption from the ban on the Chinese tech giant, with defense officials warning that it could jeopardize national security if not resolved, according to a Bloomberg report on Wednesday. 

Ironically, the US had used "national security" as an excuse when it imposed the ban on Huawei. It is evident to see that this ban was not based on so-called national security concerns at all, but was a political decision to suppress China's high-tech industry through the crackdown on Huawei. The US imposes restrictions on various products from Huawei, but it does not take into account the specific situation in different departments and fields. Now when it comes to the implementation stage, various problems begin to emerge. The Pentagon's call fully proves that unilaterally banning a Chinese company, especially a company with immense size and influence like Huawei, the US' consideration was immature, and it was just a ridiculous decision made on the spur of the moment.

Bloomberg mentioned that Huawei is "so firmly entrenched" in the systems of countries where it does business, given the company accounts for nearly a third of all global telecommunications equipment revenue, finding a replacement would be "impossible." This shows that the US' ban on Huawei has begun to hurt some of the core parts of the country's system.

Huawei's products are competitive and popular in terms of price and quality. Therefore, it is almost impossible for the US to find complete substitutes. And Washington thus can only choose to accept more expensive products, or products with inferior quality to Huawei's. Moreover, the process of finding substitutes would be long, and such substitution will bring more economic burden to the US.

Zhang Tengjun, deputy director of the Department for Asia-Pacific Studies at the China Institute of International Studies, believes that in the current environment in the US, it is unlikely that the ban on Huawei will be completely lifted across the country. However, the reality is that the US may have to consider continuing to use some of Huawei's products. This will obviously further showcase the double standards of the US on this issue. In other words, the excuse of "national security" cited by Washington is untenable, which simply demonstrates the hypocrisy of the US itself.

Ultimately, the Huawei ban didn't reach Washington's expectation to halt the Chinese company's technology development. Instead, it has provided an opportunity for the company to work on enhancing self-reliance. In an article published by the Economist titled "America's assassination attempt on Huawei is backfiring" on June 13 reads that Uncle Sam's attacks failed to kill Huawei, but have only "made it stronger." 

Washington's containment may have brought some troubles to Chinese companies in the short term, but in the long run, the US actually has no chance of winning in the "wars" it has waged.

It can be said that the US' suppression of Huawei is unprecedentedly severe, but the company's resilience is also unprecedentedly strong, which is like a banner for other Chinese enterprises. Under Washington's extreme pressure to force Chinese companies to "withdraw from US market," Huawei is an excellent example of how far a Chinese company can go.

There will gradually be more backlash against the US itself, because Huawei's competitiveness is obviously increasing, said Lü Xiang, a research fellow of US studies at the Chinese Academy of Social Sciences. He noted that the US has restricted Huawei's products in the name of national security to protect its own related manufacturers, but this kind of protection only maintains the backward production capacity in the US. In this case, such protection actually blocks US progress, and the backfire on the US will become clearer and clearer in the longer term. [My Emphasis]

Although the above cartoon’s dated 2023, the article that makes it real is a complement to the one above and also from Global Times, “US runs into 'self-imposed obstacles' as Pentagon seeks Huawei exemption.” Both articles depict the usual Outlaw US Empire behavior—not just practiced by its national government—of shooting first and asking questions later as you’ll read:

Despite US media revealing that the Pentagon is seeking an exemption from a 2019 Act that prohibits the US Department of Defense from contracting with entities that use Huawei equipment, Chinese analysts believe it's not a sign that the US will slow down its crackdown on China's technological development, but does show that the US' abuse of the "national security" concept has backfired, and that as Huawei continues to grow, the US will increasingly run into more self-imposed obstacles. 

According to a Bloomberg report released on Wednesday local time, the Pentagon is provoking "a fresh showdown" with Congress, as it feels it cannot avoid doing business with Huawei, the world's largest telecommunications provider. Some US defense officials also warned of the risk of "national security being jeopardized" if the issue is not properly handled.  

Section 889 of the 2019 National Defense Authorization Act, which went into effect on August 2020, prohibits US government agencies from buying or contracting with entities that use Huawei components.

Citing officials, Bloomberg claimed that the Pentagon believes Huawei is "so firmly entrenched" in the systems of countries where it does business that it makes finding alternatives almost a mission impossible, especially given that Huawei accounts for almost one-third of all telecommunications equipment revenue worldwide. 

The Pentagon believes that if all the stipulated restrictions related to Huawei were met, it would also disrupt the Pentagon's ability to purchase the vast quantities of medical supplies, drugs, clothing and other types of logistical support the military relies on, Bloomberg reported. 

Pentagon spokesman Jeff Jurgensen said extending the waiver would allow for purchases if they are deemed to further US national security interests. Senator Mark Warner, chairman of the Senate's intelligence committee, also admitted that a waiver may be necessary, according to the Bloomberg report.  

Sun Chenghao, a fellow and head of the US-EU program at the Center for International Security and Strategy in Tsinghua University, told the Global Times that the Pentagon's reported appeal is more about a technical and business-specific issue, and shows very pragmatic thinking on supply chain and cooperation with other countries.

"It does not mean a shift in the US strategy of containing China," said Sun, "The US' attempt to crack down on Chinese technological development is unlikely to stop." 

So far, the House and Senate committees in charge of the legislation have declined to include a waiver in the 2025 National Defense Authorization Act, according to Bloomberg. In addition, the Biden administration revoked eight licenses in 2024 that allowed some companies to ship goods to Huawei, Reuters reported on Tuesday. 

"The Pentagon's attitudes show that the previous US bill is backfiring, as the US has encountered and has to deal with Huawei's irreplaceability, including Huawei's own technology, as well as Huawei technology integrated into other countries' products," said Lü Xiang, a research fellow from the Chinese Academy of Social Sciences.

If Washington continues its restrictions and containment, it will run into more self-imposed obstacles, Lü noted. 

According to US media reports, four years after Congress ordered local network operators to remove telephone and internet equipment from Chinese companies, there is still much Huawei and ZTE equipment that has not been replaced, especially in rural areas. Only 12 percent of the companies in the Federal Communications Commission program have completed their work, while 40 percent of local network operators cannot complete the removal of Huawei and ZTE equipment due to a 3 billion funding shortfall.

If the "national security threat" claim holds water, isn't the US simply letting Huawei damage its "national security?" Lü asked, "By abusing the concept of national security, the US government has undermined the normal and just market competition."

"America's assassination attempt on Huawei is backfiring. The company is growing stronger and less vulnerable," The Economist said in a headline on June 13.

Huawei is indeed rebounding from the US' crackdown. According to Huawei's annual report released on March 29, the company's global sales revenue in 2023 was 704.2 billion yuan ($96.8 billion), and its net profit rose 144.4 percent year on year. On April 30, Huawei revealed that its profits had soared 564 percent in Q1 of 2024. 

Huawei's growth despite US attempts to write it out of its own and Western allies' markets and industrial chain also shows that the US may be able to achieve some goals in the short term, but it is almost impossible to stifle the global tech giant in the world, Sun said. 

Huawei's development shows the strong resilience of Chinese technology companies, Lü said, "by cracking down on Huawei and protecting its own companies, the US is actually encouraging local competitors to be lazy in innovation. As Huawei gradually makes real breakthroughs, the US goal of containing China's technological development will become increasingly difficult to achieve."

Just as with Russia. I find the situation hilarious. Whatever happened to the vaunted Yankee ingenuity, know-how and ability to get the job done regardless the obstacles? Or was that always just hyperbole? The self-proclaimed leader’s being bypassed in many areas. The protectionist path no longer works in today’s world as competencies globally are shared as more minds are getting educated and provided an opportunity to show their capabilities. And that aspect will continue to grow markedly in the decades to come. Yes, the competitive world can become win-win, but as with the tortoise and the hare, one cannot rest on one’s laurels. There’s also the issue of technology transfer to developing nations as Humanity strives to create a worthy life for all at the expense of none. That is separate from the issue at hand but is one that will need to be discussed in the near future.

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