This should surprise absolutely nobody: Bloomberg reported Tuesday that President Trump’s decision to allow some American chipmakers to continue doing business with Huawei followed an intense lobbying effort by industry group SIA – i.e. the Semiconductor Industry Association.
The argument SIA used to convince the president was simple yet effective: sanctions against Huawei would make US chipmakers appear to be undependable partners, which could crimp their competitiveness against increasingly sophisticated international rivals.
Before Trump left for Osaka, a team of lobbyists met with Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin to argue that the decision to add Huawei to the “entities list” – effectively blacklisting the firm by severely restricting what American firms are allowed to sell to Huawei – was short-sighted and could do serious harm to a critical American industry.
The lobbyists turned Trump’s national security argument – the idea that Huawei must be cut out of American markets because its products could enable Beijing to carry out mass espionage – on its head, arguing that cutting off US chipmakers from one of their largest international markets (China) would hurt long-term profitability as well as the company’s CapEx spend.
“Overly broad restrictions that not only constrain the ability of U.S. semiconductor companies to conduct business around the world, but also casts U.S. companies as risky and undependable, puts at risk the success of this industry, which in turn impacts our national security,” the group wrote last month. They added that the administration should take into account those factors when evaluating license applications from American firms.
And as it so happens, their arguments found their way to President Trump, who parroted some of these points when he unveiled his plan to give Huawei a reprieve.
Their talking points seem to have found their way to Trump. After concluding a high-stakes meeting with Chinese President Xi Jinping in Osaka on Saturday, the U.S. president said American firms weren’t pleased with his Huawei policy and announced that he has agreed to let them keep shipping some of their components and technology.
“I’ve agreed — and pretty easily — I’ve agreed to allow them to continue to sell that product so American companies will continue,” the president said during a press conference. “The companies were not exactly happy that they couldn’t sell because they had nothing to do with whatever was potentially happening with respect to Huawei. So I did do that.”
Though there are still some strings attached.
He later clarified he will only allow them to sell “equipment where there is no great national emergency problem with it,” without offering more details. Trump’s comments stoked confusion among industry and analysts and the White House has not yet announced specifics on the path forward for U.S. companies doing business with Huawei.
The success of this lobbying effort just goes to show: While Trump has frustrated corporate America with his sometimes erratic approach to protectionism, his own belligerent rhetoric can be successfully used against him.
via ZeroHedge News https://ift.tt/2xlAbld Tyler Durden