Trump Talk of Trade Concessions on Huawei Causing More 5G Confusion, Some Say

President Donald Trump said Thursday at a White House event that U.S. concerns about the Chinese equipment maker could potentially be resolved as part of broader trade negotiations with China. But Trump also indicated he had been fully briefed on the dangers Huawei poses to U.S. 5G ambitions.

“Huawei is something that’s very dangerous,” Trump said as he announced the government will provide $16 billion in assistance to U.S. farmers and ranchers to address effects of the trade war with China. “You look at what they’ve done from a security standpoint, from a military standpoint. It’s very dangerous.” But an agreement isn’t off the table, Trump said. “It’s possible that Huawei even would be included in some kind of a trade deal,” he said: “If we made a deal, I could imagine Huawei being possibly included in some form of or some part of a trade deal.”

Asked by a reporter how a negotiation over Huawei would look, Trump said, it would “look very good for us.” "How would you design that?” the reporter asked. “It’s too early to say,” Trump responded: “We’re very concerned about Huawei from a security standpoint.”

Trump’s stance on Huawei is “confusing,” Zack Cooper, China expert at the American Enterprise Institute, told us. “If Huawei is a security threat, then why would we include it in trade negotiations? This undermines the administration’s position on Huawei, and 5G more generally, with our allies and partners. We say Huawei is a security concern. But if the actions against Huawei just look like a U.S. play for leverage in the trade negotiations, it will be difficult for the administration to gain international support for its position.”

A year ago, Chinese leader Xi Jinping asked Trump to relieve the pressure on ZTE tied to its sanctions violations, Cooper said. “Trump did it,” he said. “Based on the president’s recent comments, it is entirely possible that we could see a replay, and that President Trump will let Huawei off the hook in exchange for a deal.” The U.S. has created leverage with its recent actions against Huawei, he said: “I hope the administration does not trade away U.S. national security for short-term Chinese promises to purchase more U.S. soybeans and natural gas.”

National security agencies “really believe” that if Huawei is part of U.S. 5G networks, “they are screwed for years to come,” said AEI visiting fellow Shane Tews. “I think they’re really worried about it.” But Trump is also “the master of the art of the deal,” Tews told us. “I don’t think there’s ever a 100 percent no.” The pact might be allowing some Huawei equipment into networks at some levels, while monitoring very closely and watching for problems, she said.

John Strand of Strand Consult cautioned against reading too much into Trump's off-the-cuff remarks. “Chinese equipment has been considered as a security threat in America since 2005,” Strand said: If Trump cuts a deal, “it won’t change the fact that China is still a security threat,” he said. Most hacker attacks worldwide are coming from China and its government knows what is happening, he said. No matter what happens, major U.S. providers are unlikely to add Huawei equipment to their networks, he said. Smaller carriers knew the risks when they cut costs by using Chinese equipment, he said.

“Up until now, the U.S. framed Huawei as a national security risk, not as a trade issue,” Roger Entner, analyst at Recon Analytics, told us. The U.S. "often does compromise on trade issues as it is a give and take, but never on national security risks.” Entner sees long-term risks in compromising here. If the U.S. strikes a deal, “it either compromises U.S. national security or exposes its claims of national security as not credible and overblown,” he said. “Any compromise would damage the trust in the U.S. government, U.S. intelligence services and their ability to protect Americans and the credibility of their claims in the eyes of Americans and allies alike.”

Will there be a deal? “Trump says [Huawei] could be included in a trade deal, so the answer is yes,” said New Street’s Blair Levin. “But a trade discussion wouldn't resolve the alleged security issues, thus the logical answer is no. So I guess Huawei is the Schrodinger's cat of trade and security policy, simultaneously both a security issue, and not a security issue, subject only to resolving other trade issues.” Schrodinger's cat is a thought experiment, often described as a paradox, devised by Austrian physicist Erwin Schrodinger in 1935.

Several possibilities remain, said Information Technology and Innovation Foundation Broadband and Spectrum Policy Director Doug Brake. The export ban could “hopefully be a temporary arm-twist to gain leverage in trade negotiations” and “this could well be effective,” he said: “Huawei is probably China’s most important national champion, and the party doesn’t like to see them founder.” But if trade disputes spiral, this could be “only the first step in a much more aggressive decoupling of the U.S. and Chinese economies,” Brake said.

“I just hope that, to the extent that Huawei poses a national security threat, that the Trump administration doesn’t fail to address the threat in the interest of advancing an agreement on trade,” said Free State Foundation President Randolph May: “They are largely separable interests and national security is paramount.”

“The U.S. is largely on its own in the unwinnable war on Huawei,” said Richard Bennett, network architect. “This misguided adventure is part bargaining chip in the larger trade war with China and part personal agenda on the part of administration officials disloyal to the president. ... It’s appropriate to extract concrete, verifiable assurances that Huawei will not compromise network security, but an outright ban is absurd.”