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Battle Between U.S. And Chinese Telecom Huawei Intensifies

NOEL KING, HOST:

The U.S. and China are fighting for control of the next generation of wireless technology, 5G. The Trump administration has gone after the leading Chinese telecom company, Huawei, undermining its ability to do business. But that could end up hurting American companies. Here's NPR's Jackie Northam.

JACKIE NORTHAM, BYLINE: The Trump administration's strategy towards Huawei is like death by a thousand cuts, imposing increasingly stringent restrictions on the world's biggest telecom equipment maker while pressuring allies not to use its products. Each move is seemingly intended to bring Huawei to its knees, says Andy Purdy, chief security officer for Huawei Technologies USA.

ANDY PURDY: We are working to maintain our survival in the face of this increasingly harmful efforts by the U.S. government to basically drive Huawei out of existence in the name of security.

NORTHAM: China considers Huawei a national treasure that will lead the way to global dominance in 5G technology. The Trump administration considers it a national security threat, saying its equipment can be used for espionage by Beijing. Washington's latest crackdown will prevent U.S. and foreign companies from selling microchips made with American knowhow and technology to Huawei. Purdy says that such a move will hurt more than just Huawei.

PURDY: If we're forced to go elsewhere, although we'd prefer to buy these components from the U.S., in the long term, it's going to really have a major impact on American jobs.

NORTHAM: The ban could represent billions of dollars in lost revenue.

Abraham Newman is a professor of government at Georgetown University focusing on how globalization transforms politics.

ABRAHAM NEWMAN: Definitely, I mean, it has consequences for U.S. firms. And they have been screaming because Huawei's a big customer.

NORTHAM: The microchip ban is also disrupting the global supply chain. Newman says suddenly, foreign companies that sell Huawei microchips made with U.S. technology are caught in the middle of the tech war between China and the U.S.

NEWMAN: Well, it's exposing the way that the global supply chain - how the U.S. government has a way to access that and leverage that to pressure Huawei.

NORTHAM: Naomi Wilson is a senior director for Asia policy at the Information Technology Industry Council, a global technology advocacy firm. She says any disruptions in the global supply chain could harm America's competitive advantage in the longer term.

NAOMI WILSON: It's important to recognize that the stability of the supply chain and of the customer base and the suppliers is really important to having a steady stream of funding for research and development in particular.

NORTHAM: Wilson says there needs to be more conversation between the U.S. tech industry and the administration before it launches new policies directed at Huawei and other Chinese tech companies.

WILSON: But unfortunately, right now, there's something of a difficulty in having these conversations. Even the name Huawei is a lightning rod.

NORTHAM: The administration's aggressive action towards Huawei comes at a particularly low point in U.S.-China relations says Robert Williams, executive director with the Paul Tsai China Center at Yale Law School.

ROBERT WILLIAMS: Everything from accountability to the COVID pandemic to Hong Kong - the latest U.S. moves against Huawei add to an already tense atmosphere, and it could lead to new reprisals by Beijing against U.S. companies operating in China.

NORTHAM: Companies such as Apple, General Motors, McDonald's, all of which count China as an important market.

Jackie Northam, NPR News.

(SOUNDBITE OF MARLEY CARROLL'S "MIGRATION") Transcript provided by NPR, Copyright NPR.