
U.S. Holds Off on Huawei Licenses as China Halts Crop-Buying - tareqak
https://www.bloomberg.com/news/articles/2019-08-08/u-s-holds-off-on-huawei-licenses-as-china-halts-crop-buying
======
jrochkind1
> The White House is holding off on a decision about licenses for U.S.
> companies to restart business with Huawei Technologies Co. after Beijing
> said it was halting purchases of U.S. farming goods, according to people
> familiar with the matter.

> ...American businesses require a special license to supply goods to Huawei
> after the U.S. added the Chinese telecommunications giant to a trade
> blacklist in May over national-security concerns.

Uh... this doesn't sound like a decision based on national security concerns,
right? If the US requires a special license to buy from Huawei due to ties to
Chinese state security... what does that have to do with how many soybeans
China buys, and why would the latter affect the former? Does Huawei have less
worrisome ties to Chinese state security when China buys more soybeans?

This is obvious to everyone, that it's got nothing to do with national
security concerns, it's just a trade war entirely unmoored from the previous
free-trade consensus? The administration feels no need to hide it? And yet
won't actually just say it either, they still provide a cover story they know
is unbelievable? What's going on exactly? This really is a new phase of global
politics.

~~~
ojbyrne
I think it was obvious when they used national security concerns to put
tariffs on aluminum and steel from Canada.

~~~
Waterluvian
I can kind of understand it if you consider having a stable, strong steel and
aluminum industry a national security issue.

Say Canada pulls an Uber and just drives all US forges out of business with
Uber cheap metals. Though I doubt we have thay much production capacity to
actually put the US at risk.

~~~
nicoburns
What gets me is the hypocrisy of the US. If it's a US industry/company under
threat then it's a national security issue. If a foreign country has any
protectionist policies, then they're communists and subject to sanctions
and/or invasion and/or having their government toppled.

I guess it's pretty straightforwardly self-serving, but surely all the other
countries' economy's who get carelessly trashed constitute a bigger national
security issue!

~~~
makomk
I think the mistake you're making is that the protectionist policies of (say)
the US and China are not remotely comparable. In particular, the whole reason
the US needs steel and aluminium tariffs is that China has used protectionism
and state subsidies to build a steel and aluminium industry so far in excess
of what the country consumes that the surplus has tanked global prices. This
is pretty much unprecidented. The US is not the only country that objects to
this; the EU wanted to put tariffs on China a few years earlier but they
couldn't agree on which goods the tariffs should apply to.

------
traderjane
The trade-off feels wrong from a naive perspective. Huawei withholding tech
can damage US tech competitiveness, whereas the US withholding soybeans...
does what? Raise the prices for soybeans in China? Make China go elsewhere for
soybeans that the rest of the world can provide?

Can the US similarly turn to alternative Huawei?

~~~
reaperducer
_the US withholding soybeans... does what?_

There was a piece about this on the radio a few months ago. It's actually a
big deal. My memory isn't exact, because of the passage of time, but
essentially, China needs America's soybeans because it can't grow enough of
them on its own. And it needs the soybeans to feed its livestock in order to
feed its people.

The natural thought is, "China can just buy soybeans elsewhere." Which is
true. Except that there are not enough countries producing soybeans for export
to fill the quantity that China requires.

A more important problem for China is seasonality. When America's soybeans are
ready to harvest, Brazil's soybeans are just being planted, and vice versa.

So it leaves China eventually in a position where it can't/won't get soybeans
from the U.S., Brazil doesn't have any soybeans to send, and none of the other
countries can make up the defecit.

Therein lies the rub.

~~~
User23
Soybeans are literally a commodity. Some third country will just buy the US
soybeans and sell them to China.

Edit: Commodities are fungible. They are things like gold, pork bellies,
soybeans, and so on where there is no meaningful difference based on where
they were produced. Buyers from some third country will buy soybeans from the
USA, relabel them as originating in their country, and flip them to China for
a profit. Trade circumvention is nothing new[1]. The US seller doesn't even
have to be complicit, once they deliver to the third party they have no
control over the labeling and they're not liable to care much either.

Edit: Regarding 5G hardware: "The basic idea is that there is little
differentiation between a commodity coming from one producer and the same
commodity from another producer. A barrel of oil is basically the same
product, regardless of the producer. By contrast, for electronics merchandise,
the quality and features of a given product may be completely different
depending on the producer."[2] So, no, 5G hardware is not a commodity.

[1] [https://agmetalminer.com/2017/05/24/what-is-trade-
circumvent...](https://agmetalminer.com/2017/05/24/what-is-trade-
circumvention-hint-its-certainly-nothing-new/)

[2]
[https://www.investopedia.com/terms/c/commodity.asp](https://www.investopedia.com/terms/c/commodity.asp)

~~~
kolanos
And 5G equipment is not a commodity?

~~~
pjc50
No? It's something with basically one and a bit suppliers and a large patent
pool.

------
fspeech
Google apps licenses may not be that big a stick for Huawei. What appears to
be happening is that Huawei swaps market shares with the likes of Xiaomi and
Oppo/Vivo. Huawei gains shares in China and cedes shares outside of China. I
was puzzled when Qualcomm reported that its Chinese customers were buying
Huawei chips. But it becomes understandable if they segregate the competition
by geographic areas. So Huawei gains chip customers from the swap as well.

------
i_am_nomad
This business will get out of hand. It will get out of hand, and we’ll be
lucky to live through it.

------
Tinfoilhat666
Huawei announces their own HarmonyOS, which can replace Android:
[https://www.androidauthority.com/huawei-
harmonyos-1017511/](https://www.androidauthority.com/huawei-
harmonyos-1017511/)

------
justicezyx
If Chinese companies are not building their own mobile OS, I would serious
doubt their intelligence. This is becoming serious ridiculous situation.

Edit: Missing "not" is a serious sin in writing...

~~~
ulfw
You doubt the intelligence of a billion people country because they build
their own OS while the Americans ban them from using theirs?

------
mytailorisrich
I'm hoping that the US have a plan to end this (not too sure considering
things like "mission accomplished" in Iraq).

One of the main policy of the Communist Party since they were founded is to
fight off foreign aggression (look at China's history since the 18th century
if you are wondering about that).

The Chinese also have a strong cultural concept of "face" and "saving face".

Thus, I don't think that hitting China will produce any result unless there is
an opportunity to get a deal that allows both parties to save face.

China is willing to endure, which is also an important Chinese cultural
aspect, and their government does not have the pressure to please crowds in
time for the next elections (which means all the time in the US).

At the moment I think that this just reinforces Chinese nationalism and the
Chinese people's willingness to stick behind their government.

------
asdf333
the common knowledge in the industry is that most companies have found a way
around it anyway so it doesn't much matter...

------
8bitsrule
In 1954 novel 'Lord of the Flies', the stupid carnage didn't stop until an
adult set foot on the island. Where are those adults today?

~~~
Synaesthesia
We’re all around. We’re called ordinary people. It’s up to the people to hold
politicians to account and keep them in check.

Nobody is going to do it for us, we need to organize and agitate ourselves.

