U.S. Should Speed Huawei Probe to Avoid China's Tit-for-Tat

(Bloomberg Gadfly) -- Whether or not Huawei Technologies Co. is guilty of sanction-busting isn’t really the point.

Various levels of the U.S. government are searching for excuses to clamp down on China’s pre-eminent technology hardware company. This could fall under the rubric of violating a ban on sales to Iran, espionage, or anything else the U.S. doesn’t like.

It’s possible that Huawei may have committed infractions. Or not.

What’s important is that investigations into alleged violations are being escalated. From one rogue company – ZTE Corp. – to another. Two is a coincidence, three is a trend.  If yet another Chinese company is dragged into these probes, Beijing will have the cover it needs to get even tougher on the U.S. and its corporate giants.

U.S. Should Speed Huawei Probe to Avoid China's Tit-for-Tat

Right now, Qualcomm Inc. is in the cross-hairs. It already got past an antitrust investigation that saw the chip designer pay a fine but otherwise keep its business model intact.

But Qualcomm’s takeover of NXP Semiconductors NV is being held up by Chinese authorities who have yet to sign off. They could say yes, they could say no, or they could say nothing at all, letting it drag on. The latter scenario could be the most disruptive because waiting and not knowing prevents the firms from either moving ahead with integration or making a decision to cancel the deal.

Beijing may keep Qualcomm-NXP on hold while the FBI, Commerce Department and U.S. Treasury toil away at their Huawei sanctions investigation. Tit-for-tat. If so, a fast resolution might be in the best interests of Qualcomm just as it starts to see some growth in the China market.  

In this round of the U.S.-China trade spat, time could be of the essence.

Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

To contact the author of this story: Tim Culpan in Taipei at tculpan1@bloomberg.net.

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