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Last month, in an interview with Bloomberg Businessweek, Microsoft’s Brad Smith suggested that U.S. sanctions against Huawei should be revisited, ensuring that anything done has a “sound basis in fact, logic, and the rule of law.” The interview landed badly with those advocating for increased sanctions against the Chinese tech giant, and, in an October 7 letter, a group of U.S. senators have written to Microsoft’s president to insist that “security concerns about Huawei are real and urgent.”
In their letter, the five Republican Senators, Tom Cotton, Marco Rubio, Rick Scott, Mike Braun and Josh Hawley detail their claims of espionage, technology theft and economic warfare, which they say “makes a compelling case that Huawei serves as an intelligence gathering apparatus for the Chinese state.” The senators quote Secretary of Defense Mark Esper: “Huawei is the means by which Huawei would get into our networks and our systems, and either attempt to extract information or corrupt it, or to undermine what we’re trying to do.”
Related: Trump Gets New Huawei Warning—From Microsoft
In his interview, Smith said he had seen first-hand that the justifications for action against Huawei are thin and draped in inference and “need to know.” Smith told the newspaper that “oftentimes what we get in response is, ‘well, if you knew what we knew, you would agree with us’. And our answer is, ‘great, show us what you know so we can decide for ourselves. That’s the way this country works’.”
The Senators acknowledge Smith’s point, that much of the government information to support its case is classified, telling Smith that they “sympathise with your expressed concern that Microsoft and other businesses are not privy to this intelligence.”
But the senators also cite the reported espionage claims against Huawei in Ethiopia, Uganda and Poland. The Finite State technology report that claimed that “Huawei devices quantitatively pose a high risk to their users. In virtually all categories we examined, Huawei devices were found to be less secure than those from other vendors making similar devices." And the Henry Jackson Society research that claimed a significant number of Huawei employees maintain military and intelligence links, resulting in “far closer links between the telecommunications company and military-backed cyber agencies than previously thought."
The Senators also reference Huawei CEO Ren Zhengfei’s own past links to China’s military, and that the Chinese Communist Party “has office space and minders inside Huawei’s Shenzhen headquarters.”
In his interview, Smith related what was being done to Huawei in the tech industry to what might take place in the leisure industry, given that this would be more familiar territory for U.S. President Trump. “To tell a tech company that it can sell products, but not buy an operating system or chips, is like telling a hotel company that it can open its doors, but not put beds in its hotel rooms or food in its restaurant. Either way, you put the survival of that company at risk.”
The Senators list out the industrial allegations against Huawei in response to this, with the inference that the U.S. technology industry has suffered damage. This includes alleged IP-theft against the likes of T-Mobile, Cisco, Motorola and Nortel. Allegations that China helped fund Huawei’s stellar growth with “grants, export finance and loan guarantees.” And accusations central to the case against Huawei CFO Meng Wanzhou, that the tech giant used shell companies in Iran and Syria to breach U.S. sanctions.
There is little surprise in this letter and no specifically new information. There was something of a backlash to Smith’s comments in his Bloomberg interview, and this letter is best seen as an attempt to put the record straight.
Huawei is having something of a rollercoaster few weeks. The company’s first smartphone impacted by U.S. sanctions—the Mate 30—has barely been out of the tech headlines since its launch in September. And so Huawei watchers are now seeing the first tangible data as to the likely impact of the blacklisting on Huawei’s run rate business unless and until the political situation changes.
