Reports allege that a Cisco-led lobbying effort prompted a scathing U.S. report on the national security threat posed by China's Huawei. This is how trade wars start.
WASHINGTON -- The back story on the scathing congressional report on security threats posed by Chinese telecom giants is beginning to emerge.
Reportedly at the center of U.S. lobbying effort against Chinese telecom gear manufacturer Huawei is none other than Cisco Systems, the U.S. network equipment giant whose Chinese partners have included Huawei.
The Washington Post reported this week that it obtained a copy of a September 2011 “presentation” it said was authored and distributed by Cisco. The Post article asserts that the Cisco document is part of a lobbying campaign on Capitol Hill to blunt Huawei’s access to the U.S. telecom equipment at a time when carriers are building out faster IP-based networks.
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The Post quoted the Cisco report as asserting that “Fear of Huawei spreads globally,” adding, “Despite denials, Huawei has struggled to delink itself from China’s People’s Liberation Army and the Chinese government.”
The article linked what is said is a Cisco-led lobbying effort to this week’s release of the House Intelligence Committee report warning that Huawei and China’s other large telecom equipment vendor, ZTE, pose a threat to U.S. national security.
Cisco declined to comment on the Post story or the House report, saying only that it is attempting to get a copy of the document cited in the article to “verify its validity.” The company acknowledged to the Post it has recently “taken a more competitive stance against competitors including HP, Huawei and Juniper.”
From here, the alleged Cisco lobbying campaign against former partner Huawei looks like a continuation of a long-running intellectual property fight that ended in a stalemate. During a visit to Huawei headquarters in the late 1990s, we asked Huawei executives about widespread allegations of IP theft. We were shown the door.
The Cisco lobbying effort, if in fact that’s what’s going on, coupled with the House report on Huawei along with concerted U.S. efforts to stop domestic carriers from buying Chinese networking products constitutes an major escalation of U.S.-Chinese trade frictions.
If it continues, a trade war with China in key sectors like telecommunications and energy (the Commerce Department announced tariffs this week as high as 36 percent on Chinese solar panels) is inevitable.
The timing of the House report’s release on Huawei and ZTE was not a coincidence. Bashing China has become a standard election-year tactic. In the long run, we’d be far better off competing against China than starting trade wars that will only hurt both nations.
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