Technology

Huawei hires trade lobbyists as sales slow in US-China fight

Huawei hires trade lobbyists as sales slow in US-China fight

Huawei Technologies hired the law firm Sidley Austin tolobby on trade as the US pressures allies to join it in blacklisting theChinese telecom giant and the company finds itself increasingly mired inPresident Donald Trump's trade war with Beijing.

The lobbying, which began in July, will focus on exportcontrols, trade sanctions "and other national security-related topics,"according to a disclosure filed with the US Senate. The document shows thatHuawei is deepening its ties to Sidley Austin, which is already working on thecompany's legal challenges in the US, while also ramping up its lobbyingpresence.

Huawei, which is under an existential threat after the Trumpadministration blocked it from buying American technology overnational-security concerns, has been drawn into the latest escalation of thetrade war.

Only six weeks ago, following a meeting in Japan withChinese President Xi Jinping, Trump said he'd delay imposing some restrictionson US companies' sales to Huawei. The US even invited companies to apply forlicenses under an exemption to the Huawei ban.

But Bloomberg reported on August 8 that the White House washolding off any decisions on those licenses. The delay follows a series ofrapid-fire, tit-for-tat moves including Trump announcing plans to imposetariffs on $300bn of Chinese imports in September and China halting purchasesof US farm goods. The US also declared China a currency manipulator.

Deepens ties

Sidley Austin is already defending Huawei and a US affiliateagainst charges that they defrauded at least four banks by concealing businessdealings in Iran in violation of US sanctions.

US prosecutors are seeking to disqualify the company's leadlawyer in the case, James Cole, because they say his former role as the No. 2at the Justice Department gave him access to classified information thatrepresents an "obvious conflict of interest." A hearing has beenscheduled in the matter in September.

Meng Wanzhou, Huawei's chief financial officer and thedaughter of its billionaire founder, Ren Zhengfei, is also charged in the case.She remains free on bail in Vancouver while she fights extradition to the US.

Sidley is also representing Huawei in a suit against the USover seizure of telecommunications equipment during an investigation intowhether the gear required export licenses. Neither Cole nor the lawyers listedin that lawsuit are among the lobbyists on the disclosure.

The Chinese company is one of the world's biggest purchasersof semiconductors. Continuing those sales is crucial to the fortunes ofchipmakers such as Intel, Qualcomm and Broadcom, who sent their chiefexecutives to meet with Trump in July.

Alphabet's Google stopped providing Huawei with a version ofits Android operating system, which lets apps run and provides mobile securityon smartphones. That means Huawei, the world's second-biggest smartphoneseller, can no longer pre-install Google's popular apps, like Gmail andYouTube, on Huawei devices.

To fight back, Huawei last week unveiled an in-houseoperating system, called HarmonyOS, saying it can replace Android if Google'ssoftware is barred from its future smartphones. But Ren also said the companyneeded a lot more time to build an apps ecosystem, a requirement for anyoperating software to thrive in the long run.

American onslaught

Huawei, which the US says poses a risk because it mustcooperate with Beijing's espionage agencies under Chinese law, is kicking off ayearslong overhaul to create an "iron army" that can help it survivean American onslaught while protecting its lead in next-generation wireless,Ren warned in an internal memo seen by Bloomberg News.

The US says Huawei can build backdoors into its equipmentand that it has stolen other companies' intellectual property. TheShenzhen-based company counters that governments and customers in 170 countriesuse its equipment, which poses no greater cybersecurity threat than that of anycommunications technology vendor. Huawei says that the campaign results fromWashington's realisation that the US has fallen behind in developingfifth-generation mobile networks.

Huawei, which had all but shut down its Washington lobbyingoperation at the end of 2018, has also recently hired the law firms of Steptoe& Johnson LLP and Jones Day as lobbyists. After Samir Jain, a Jones Daypartner who served on President Barack Obama's National Security Council,registered to lobby for the company, Trump criticized the move in a tweet. Thecompany says Jain will help with legal efforts and not lobby.

Sidley Austin also represents the US division of Chinesevideo surveillance company Hangzhou Hikvision Digital Technology, Alibaba Groupand organisations with ties to the governments of Hong Kong and Russia,according to disclosures. It also represents Bloomberg, the owner of BloombergNews.