Commerce 'Pushing Forward' With Effort to Increase Restrictions on Foreign Exports to Huawei, Ross Says

The Commerce Department is “pushing forward” on increased restrictions of foreign exports to Huawei that contain U.S. content, Secretary Wilbur Ross said during a March 5 Senate hearing. Sen. Chris Van Hollen, D-Md., told Ross he hopes Commerce follows through with the restrictions -- which would include changes to the de minimis rule and the Direct Product Rule (see 2002050047) -- adding that Commerce has been “appropriately aggressive” in pursuing more stringent controls on technology exports to Huawei and China. But Van Hollen noted that Commerce has faced pushback from other parts of the Trump administration, including the Defense and the Treasury Departments (see 2001240012).

“I support the direction your department seems to be taking,” Van Hollen said during the hearing of the Senate Appropriations Subcommittee on Commerce. “It seems other parts of the administration are rowing in a different direction.” He said the increased restrictions are warranted because Commerce’s export controls and its placement of Huawei on its Entity List are not doing enough to cut off sales to the Chinese technology giant. “A number of U.S. companies and other companies have been finding ways to sell equipment to Huawei without running afoul of the Department of Commerce’s penalties,” Van Hollen said.

Ross said he did not object to pushback from other parts of the administration, saying that on “almost any trade issue, there’s a lively interchange within people in the administration.” He said those discussions help inform policy. “I think that’s good and not bad,” Ross said, “because at the end of the day, it’s the president who sets policy, and it’s important for him to hear all sides of it.” Ross did add, however, that Commerce is committed to restricting exports to Huawei. “I think it’s quite clear my view that they do pose genuine security threats both to us and to any other country that uses them,” he said. “So I intend to continue to implement those views.” Van Hollen said he hopes Ross is “winning this debate in the administration.”

Van Hollen also pressed Ross on securing more multilateral support against Huawei, saying he is concerned that other U.S. actions -- such as threats to impose Section 232 tariffs on the United Kingdom (see 2003020061) and others -- is hampering that effort. “It’s a lot harder to get their cooperation on those issues when we’re threatening to beat them with a stick with Section 232,” Van Hollen said. “I think we would be much better off and successful keeping our eye on the main goal here, which is making sure we don't get ripped off by China’s unfair trade practices and technology theft in this area.”

Ross disagreed, saying the threat of Section 232 tariffs “helped” trade negotiations with China, Japan and the U.S.-Mexico-Canada Agreement, strengthening the U.S.’s trade relationships. “I would hope you would look at the end result of the whole package of trade activities that we’re doing rather than isolate one portion of them,” Ross said. He did say, however, that the U.K.’s decision to allow Huawei 5G equipment into its communication infrastructure was a “mistake” (see 2002040056) and warned Germany to not follow the same path. “It’s a risk that’s not worth taking,” Ross said.