Commerce Secretary Downplays Administration Disagreements on Huawei

Commerce Secretary Wilbur Ross downplayed any disagreement within the Trump administration on how much it wants to restrict Chinese telecom equipment manufacturer Huawei via U.S. trade rules. His Thursday exchange with Sen. Chris Van Hollen, D-Md., came during a Senate Appropriations Commerce, Justice, Science and Related Agencies Subcommittee hearing on the Commerce Department’s FY 2021 budget request. Sen. Shelley Moore Capito, R-W.Va., questioned the agency's broadband coverage data collection.

Trump wants to reduce Commerce’s budget to $7.9 billion from the $15 billion the department received in FY 2020. The administration proposes increasing NTIA’s budget 78% to $72.2 million. It would increase Patent Office funding slightly to $3.7 billion and reduce the National Institute of Standards and Technology’s appropriation 28% to $737.5 million (see 2002100056). Ross briefly cited Commerce’s proposed hike in spending for tech R&D in “leading-edge industries and technologies.”

Ross said in his written testimony the increased R&D funding includes almost $49 million for NIST research on artificial intelligence, with additional spending on “quantum information science, 5G and advanced communications, advanced manufacturing, and biotechnology.” NTIA’s increased funding includes $25 million “for modernizing its 30-year-old spectrum management systems,” which “will help accelerate the transition to 5G and support the private sector’s need for additional spectrum bandwidth,” Ross said.

Senate Appropriations Commerce Chairman Jerry Moran, R-Kan., and ranking member Jeanne Shaheen, D-N.H., raised concerns about the size of some proposed Commerce cuts. Moran praised proposed increases in NTIA’s annual funding and R&D money. NTIA’s proposed budget increase for “testing new wireless networks and expanding spectrum management” is “an important component” of U.S. work “to win the 5G race,” Moran said. “We also must not forget the concerns from communities across the country who are unable to fully access broadband.”

Van Hollen noted he and Ross “share an interest in making sure the United States remains at the cutting edge in key competitive technologies,” including 5G and AI, against China. The senator praised Commerce for being “appropriately aggressive” in “trying to prevent Chinese companies from taking advantage of technology theft” and “unfair trade practices.” Other “parts of the administration are rowing in a different direction” in opposition to Commerce’s recommendations, including DOD pushback against the department’s efforts to restrict U.S. semiconductor exports to Huawei (see 2001290019), Van Hollen said. DOD had later backtracked.

“On almost any trade issue, there’s a lively interchange" among "people in the administration,” Ross said. “I think that’s good and not bad, because at the end of the day, it’s the president who sets policy and it’s important for him to hear all sides.” It’s “quite clear” Huawei poses “genuine security threats both to us and to any other country,” so “I intend to continue to try to implement those views,” he said.

Van Hollen argued the U.S. would be “much better off” in its efforts to win “the debate on Huawei” and convince “Germany, the U.K. and others to support us” on that issue if the government weren’t also trying to “beat them with a stick” on other trade matters like 1962 U.S. Trade Expansion Act Section 232 tariffs on steel and aluminum. The U.S. should “provide a united front across the array" of trade issues "with our European partners,” he said.

Ross isn't satisfied with the U.K.’s recent decision to allow equipment from Huawei on “non-core” parts of its communications infrastructure (see 2001280074), calling it a "mistake." Germany is among others considering similar partial bans. Fifth-generation wireless “is not something that you can so readily separate core from periphery,” he said. If “they’re wrong in their theory that they can mitigate” Huawei’s national security risks, “the danger of shutting down your entire economy, shutting down your entire government, is a risk that’s not worth taking.”

Senate Communications Subcommittee Chairman John Thune, R-S.D., led filing Thursday of the Network Security Trade Act (S-3994), which aims to ensure U.S. communications infrastructure security is a clear negotiating objective of our country’s trade policy. Thune previewed the bill during a Wednesday Senate Commerce Committee hearing on 5G supply chain security issues (see 2003040056). The bill would update the 2015 Trade Promotion Authority law "to include a negotiating objective related to the security of communications networks." The bill “is critical as the [U.S.] begins formal trade talks with the [U.K.] and other allies,” Thune said Thursday on the Senate floor.

S-3994 would also direct the executive branch to ensure that the equipment and technology used to create the global communications infrastructure are not compromised. Three senators signed on as original co-sponsors: Intelligence Committee Vice Chairman Mark Warner, D-Va.; Deb Fischer, R-Neb.; and Debbie Stabenow, D-Mich.

Capito asked Ross for an update on NTIA’s work to make sure collected broadband coverage data is “granular and “accurate.” NTIA has made “great progress” in its broadband mapping program, including data-sharing partnerships with 13 states (see 2002120053), Ross said. The new geographic information system platform “should permit NTIA to implement a secure, cloud-based approach to this problem.”