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Treasury Secretary Steven Mnuchin in recent days urged U.S. suppliers of Huawei Technologies Co. to seek licenses to resume sales to the blacklisted Chinese firm…The development reflects a recent reversal of the Trump administration’s get-tough stance on Huawei….

—The Wall Street Journal, July 10, 201929

As you read this, Huawei remains on the existential threat cusp of consolidating global control of 5G, one of the most powerful civilian and military technologies in world history.

The previous “Gs” represent the technologies that have powered your own cell phone and wireless communications. If you can hear me now, and you’re in the middle of just about nowhere, you’re probably connected to at least a 4G network.

5G is 4G on rocket fuel. It stands for “fifth-generation cellular communications technology,” and 5G’s dramatic increase in both speed and capacity suggests more of a revolution than an evolution.

This is a very dangerous revolution because 5G is not just a way to make lightning-fast, no-drop phone calls to your friends or in a business environment. 5G also has the power to seamlessly interconnect both people and machines in ways that will lead to a dramatic increase not just in productivity but also in dangerous cyber vulnerabilities and military lethality.

To be macabrely specific here, just imagine Communist China using Huawei’s 5G networks to turn off America’s electricity grids and transportation systems—or to make US Air Force planes drop from the skies over the Taiwan Strait—and you get the existential threat picture.

My point is simply that you don’t need a classified briefing—although I had plenty of those on 5G—to understand the potential pitfalls of allowing a Communist Chinese state-directed company like Huawei to seize the commanding heights of 5G. And when I say “commanding heights,” I’m referring to Huawei’s global strategy to be the technology and network of choice for the communication networks of every country around the world—from the salons of Europe and flyover country of America to the teeming cities of Africa and Asia.

In light of all we knew, we on the Trump trade team had a solemn duty to stop this particularly pernicious form of Chinese economic expansionism from occurring on POTUS 45’s watch. So what exactly did we do—and not do—about the Huawei 5G threat?

Wilbur Strikes, Mnuchin Strikes Back

On the “do” side, I worked with warriors like Josh Steinman at the National Security Council and Nazak Nikakhtar at the Department of Commerce on Executive Order 13873, which the Boss signed on May 15, 2019. If properly implemented, this EO would have effectively been a death sentence for Huawei.

Not only would US telecommunications companies have been prevented from buying any Huawei equipment, Huawei would also have been denied market access to the computer chips it needs to manufacture the cell phones that consumers need to access Huawei’s 5G network. This would have indeed hurt mightily as Huawei holds a significant share of the world cell phone market and relies on that market for an equally significant share of its revenues.

When POTUS signed the executive order, I thought: “This is as tough an approach as it gets. Good for us.”

Soon, however, and once again, the Bad Personnel computer chips started hitting the “pull our punches” fan. Not surprisingly, the pressure started with Neville Mnuchin whining both privately in the Oval and publicly in the media that this latest crackdown on China would make it more difficult for him and Lighthizer to negotiate the Skinny Ass Phase One trade deal.

There was also relentless pressure from Deep Swamp lobbyists representing the semiconductor and telecommunications industries. Each of these sectors had their profit and loss statement panties in a twist but for a different reason.

America’s semiconductor companies wanted to sell chips to Huawei to boost revenues.

In contrast, the wireless conglomerates wanted to buy cheap chips from Huawei to decrease costs.

Of course, nowhere in this profit maximizing calculus was any reference to either economic or national security. And that’s what pisses me off so much about the Deep Swamp in Washington—all responsibility stops at the shareholder shore.30

We Fold Like a Cheap Pinstripe Suit

For (all too short) a time, POTUS held firm. However, a chink in the Oval Office armor began to develop when Mnuchin, Kudlow, and Ross argued that there was no point in not selling at least some chips to Huawei—specifically, the lower end commoditized chips.

As their Wall Street transactionalist argument went, Huawei would simply be able to buy these low-end chips from foreign competitors like Samsung and that would only hurt American companies like Intel and AMD. So why not give Huawei a short-term waiver for certain kinds of commoditized chips?

Why not indeed? This typical short term rug merchant thinking blissfully ignored any possible political blowback—as well as the core mission, which was to bring Huawei to its knees. And the reason for this rug merchant thinking is because of something that these Wall Street transactionalists could simply never understand during my four long years of trading sharp elbows with them:

To really stand up to Communist China, we as a country were going to have to endure some temporary pain—whether it be pain to our farmers or our chipmakers who would sell less to China or pain to American consumers who might have to pay a bit more for their goods.

However, in their purely tactical pragmatism, Wall Street transactionalists like Ross and Kudlow never wanted to endure such pain for the sake of the broader mission while Mnuchin himself never even embraced the mission.

If Steve, Larry, and Wilbur had been generals commanding our troops during the Korean War, they never would have tried to take Pork Chop Hill—or in this case Huawei Hill—for fear of taking casualties.31

Here, however, were the two big problems with giving Huawei waivers to keep buying at least the low-end commoditized American chips:

First, even as we were mitigating some of our own pain with these sales, we were doing the exact same thing for Huawei—making it less painful for them to make what they already saw was a necessary transition away from the American supply chain. And the more time that we gave Huawei to make that transition to independence from American semiconductor manufacturers, the less likely our attempt to take Huawei off the global chessboard would be.

To succeed, we had to hit them now with the weapon we had that would work now. That’s because over time, that weapon would become increasingly ineffective.

Second, there was the hypocrisy of it all. Consider, here, that a major part of our Huawei foreign policy was to discourage our allies around the world from committing to the Huawei 5G system. If we could stop countries like Canada, Germany, and Japan from committing to Huawei networks, this would be an equally effective way of killing the Huawei teenager who had long since left the crib. But how could the US credibly demand that other countries wean themselves from the teat of Huawei’s cheap, state-subsidized 5G milk if we were granting waivers to Huawei so America itself could keep sucking on that teat?

The answer, of course, is that you simply can’t credibly implement a foreign policy on the foundation of such hypocrisy, and the granting of waivers to Huawei would significantly undercut the efforts of our State Department to go forth and preach the gospel of a free world free from the dangers and tyranny of Huawei.

So once again, with a series of Bad Personnel waivers to Huawei, the Wall Street transactionalists made us look like rug merchants in the eyes not just of our own people—and the 2020 electorate!—but also in the increasingly jaundiced eyes of the world.

Bad Personnel is Bad Policy is Bad Politics indeed. But we weren’t done yet pulling our punches and eroding the image of Donald J. Trump as a Tough on China president.