Former Homeland Security Secretary on Huawei: 'It's pretty clear ... they're an instrumentality' of China

Akiko Fujita
·Host
Updated

Former Homeland Security Secretary Tom Ridge called on the Trump administration not to use Chinese telecommunications giant Huawei as leverage in broader trade negotiations with China, saying national security should be a “non-negotiable item.”

Speaking to Yahoo Finance’s The Ticker this week, Ridge reiterated U.S. intelligence claims that Huawei poses a security threat, in part because of its alleged proximity to the Chinese government, though company founder Ren Zhengfei has repeatedly dismissed those claims.

“It’s pretty clear that their conduct demonstrates time and time again, they are an instrumentality of the [Chinese] government,” Ridge said.

‘Someone has to draw a line’

The world’s largest telecommunications equipment provider, Huawei has found itself in the crosshairs of the U.S.-China trade war. In May, the Commerce Department added the company to the entity list, effectively barring American companies from selling supplies to them. That followed the arrest of Chief Financial Officer Meng Wanzhou, Ren’s daughter, and a slew of lawsuits that pointed to deliberate attempts by the company to steal technology secrets from American firms.

WASHINGTON, DC - MARCH 1: Former Department of Homeland Security Secretary Tom Ridge speaks during an event to mark the 15th anniversary of the Department of Homeland Security, March 1, 2018 in Washington, DC. The Department of Homeland Security was created after the September 11 attacks and the agency combined 22 various federal departments and agencies into one integrated cabinet agency. (Photo by Drew Angerer/Getty Images)
Former Department of Homeland Security Secretary Tom Ridge speaks during an event to mark the 15th anniversary of the Department of Homeland Security, March 1, 2018 in Washington, DC. (Photo by Drew Angerer/Getty Images)

Still, the White House has sent mixed messages on its intention to tie Huawei to broader trade discussions with the Chinese. Last month, President Trump vowed the U.S. would not “do business with Huawei” only to add that “doesn’t mean we won’t agree to something if and when we make a trade deal.” Meanwhile the Department of Justice, which is conducting a criminal probe into the company, has maintained that Huawei remains separate from trade.

Ridge reiterated DOJ’s stance, saying national security should not be used as a negotiating tool.

“At some point in time, someone has to draw a line, a line of demarcation to say, okay, all these things we’ll negotiate because it’s in our mutual interest,” he said. “But as far as I’m concerned, national security and Huawei being embedded in your network, that is a non-negotiable item.”

A woman gets her bearing outside a Huawei store in Beijing Monday, May 20, 2019. Google is assuring users of Huawei smartphones the American company's services still will work on them following U.S. government restrictions on doing business with the Chinese tech giant. (AP Photo/Ng Han Guan)
A woman gets her bearing outside a Huawei store in Beijing Monday, May 20, 2019. Google is assuring users of Huawei smartphones the American company's services still will work on them following U.S. government restrictions on doing business with the Chinese tech giant. (AP Photo/Ng Han Guan)

Huawei suppliers in the U.S. like Qualcomm (QCOM) have pressed the administration to ease restrictions on the Chinese firm, in part because of the pressure they create on their bottom lines. In July, CEOs of seven tech companies including Google’s (GOOG, GOOGL) Sundar Pichai met with administration officials in Washington. Shortly after, the Commerce Department granted Huawei a 90-day extension, to comply with the trade ban.

On Tuesday, Microsoft (MSFT) President Brad Smith, whose company supplies Windows software to Huawei, said the administration’s policies against Huawei could lead to a “new digital iron curtain down the Pacific.”

While the U.S. has convinced close allies like Australia and Japan to ban the use of Huawei equipment in its 5G infrastructure, Europe has remained more cautious in its response to American claims of espionage. With the European Agency for Cybersecurity set to release its complete threat assessment of its 5G strategy on Oct. 1, Ridge urged EU members to reconsider their use of Huawei equipment.

“Cheaper and faster is not a reason to compromise national security,” he said. “Let’s hope that their assessment is clear.”

Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter at @AkikoFujita

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