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Intel exec: Why Trump's ban on Huawei is wrong
Krystal Hu Reporter Yahoo FinanceJune 12, 2019
American tech companies may be restricting their dealings with Huawei following the Trump administration’s ban on the Chinese telecom giant, but they are also speaking up against it in an effort to reverse the ban.
Intel (INTC) is working closely with Washington as well as Huawei’s CEO Ren Zhengfei to mitigate the ban’s impact on the U.S. chipmaker, Peter Cleveland, deputy general counsel and the vice president of the law and policy group at Intel, said to a group of Chinese investors on Monday. Intel is a supplier to Huawei, which accounts for about 1% of Intel’s revenue, according to Goldman Sachs.
“A more constructive approach, where we can find solutions to address cyber hygiene in Huawei’s networks, in a positive way and informative way, so that there's more testing in their networks, would be more effective, rather than a sledgehammer approach that wipes out their business here,” said Cleveland.
Speaking at the China General Chamber of Commerce–USA Summit, Cleveland said the business environment in the U.S. has become more difficult for Intel, with tariffs, entity listings and sanctions that are impacting its Chinese business partners.
Targeting Chinese companies by administrative measures also sets an example for the Chinese side to mirror, Cleveland said. Beijing already said it will create its own “unreliable list” in response to Washington’s entity list. The list could include companies that would cut supply to U.S. firms. Meanwhile, another U.S. company, FedEx, is being investigated for allegedly diverting Huawei’s packages.
Intel is one of the most successful American companies in China. In 2018, China contributed to over a quarter of Intel’s $70.8 billion in revenue.
“It constrains our economic competitiveness and then has a ricochet effect in Beijing. Obviously, your country then takes similar steps,” Cleveland said. “So the results are negative on both sides.”