Huawei charges escalate Trump fight with China

Huawei charges escalate Trump fight with China
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The criminal charges against Chinese firm Huawei mark a sharp escalation in the Trump administration’s fight with China. 

The company and Beijing are vowing to fight back and both sides are digging in, setting the stage for a battle that will likely impact upcoming trade talks.

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The charges come at a critical time. The White House announced that it will host a Chinese delegation in Washington, D.C., on Wednesday and Thursday for trade talks, as it attempts to bring a close to the months-long dispute between the two nations.

Trump officials have insisted the charges against Huawei are separate from the trade talks. White House press secretary Sarah Huckabee Sanders said Monday that the two “are not linked, they’re a totally separate process.” On Tuesday, Treasury Secretary Steven MnuchinSteven Terner MnuchinThe Hill's Morning Report — After contentious week, Trump heads for Japan Artist designs stamp to put Harriet Tubman's face over Jackson's on bills On The Money: Senate passes disaster aid bill after deal with Trump | Trump to offer B aid package for farmers | House votes to boost retirement savings | Study says new tariffs to double costs for consumers MORE also said they were “separate issues.”

But the charges add another complication to the already contentious talks.

U.S. officials have vowed to make China’s alleged theft of trade secrets a central issue in those discussions.

Lawmakers have widely praised the enforcement action against Huawei — and many have also expressed concerns about the administration using it as a bargaining chip in trade talks.

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On Tuesday, Sen. Marco RubioMarco Antonio RubioFrustration boils over with Senate's 'legislative graveyard' Senate passes disaster aid bill after deal with Trump GOP senators work to get Trump on board with new disaster aid package MORE (R-Fla.) said he was worried the president could step in and make a move to alleviate the charges against Huawei.

President TrumpDonald John TrumpNASA exec leading moon mission quits weeks after appointment The Hill's Morning Report — After contentious week, Trump heads for Japan Frustration boils over with Senate's 'legislative graveyard' MORE previously suggested that he would intervene over Huawei if it meant securing a better trade deal with China, a statement that received criticism from his own party.

“I think we have to have better trade deals on the basis of trade,” Rubio told The Hill. “I think we’re going to have laws, and those laws should be followed and I think they should be enforced.

“If we allow a Chinese-based company to violate our laws without punishment in exchange for favorable terms on a trade deal, or better terms on a trade deal, it sets a terrible precedent,” he continued, urging tough action against Huawei.

U.S. officials, including acting Attorney General Matthew Whitaker, FBI Director Christopher Wray and Homeland Security Secretary Kirstjen NielsenKirstjen Michele NielsenCongressional Hispanic Caucus demands answers on death of migrant children Trump expected to tap Cuccinelli for new immigration post Kobach gave list of demands to White House for 'immigration czar' job: report MORE, announced the pair of indictments against Huawei in a dramatic show of force at a press conference on Monday.

The charges allege that Huawei stole intellectual property from T-Mobile, obstructed justice, committed wire fraud and violated U.S. sanctions.

China has already come out against the charges, calling them an “unreasonable crackdown.”

Canadian authorities arrested Huawei Chief Financial Officer Meng Wanzhou in Vancouver late last year, at the direction of U.S. authorities. The U.S. formally requested her extradition on Tuesday; Meng is also named in one of the newly unsealed indictments.

China has appeared to retaliate in the weeks since Meng’s arrest, detaining a pair of Canadian citizens and resentencing a Canadian man in prison on drug smuggling charges to death. Both the U.S. and Canada have condemned the death penalty case.

The U.S. intelligence community has long raised concerns about the threat from Chinese telecom companies like Huawei and ZTE, claiming that Beijing could use their products to spy on Americans. Those concerns were aired by both lawmakers and intelligence officials Tuesday at a Senate Intelligence Committee hearing on global threats.

“You can raise your hand if you respond yes to my questions. How many of you would use a telecom product made by Huawei and ZTE?” Sen. Tom CottonThomas (Tom) Bryant CottonThe Hill's Morning Report — After contentious week, Trump heads for Japan Republicans spend more than million at Trump properties Hillicon Valley: Assange hit with 17 more charges | Facebook removes record 2.2B fake profiles | Senate passes anti-robocall bill | Senators offer bill to help companies remove Huawei equipment MORE (R-Ark.) asked the panel of intelligence leaders, none of whom raised their hands.

However, Director of National Intelligence Dan CoatsDaniel (Dan) Ray CoatsHillicon Valley: Facebook co-founder calls for breaking up company | Facebook pushes back | Experts study 2020 candidates to offset 'deepfake' threat | FCC votes to block China Mobile | Groups, lawmakers accuse Amazon of violating children's privacy Experts are studying mannerisms of 2020 candidates to help offset threat of 'deepfake' videos Bolton held unexpected meeting on Iran with top intel, military advisers at CIA: report MORE said that concerns with the companies are not a black-and-white issue and offered to provide more information during a closed classified session with lawmakers.

“While I’ll defer to the closed session, I suspect if I asked a fairer question, which is how many of you would recommend that people who are not heads of intelligence agencies, like your neighbors or church members or high school friends use Huawei and ZTE there would also be six no votes of confidence,” Cotton replied.

In a threat assessment released Tuesday, the intelligence community also pointed to China as a “persistent cyber espionage threat.”

“Beijing will authorize cyber espionage against key US technology sectors when doing so addresses a significant national security or economic goal not achievable through other means,” the report reads.

“We are also concerned about the potential for Chinese intelligence and security services to use Chinese information technology firms as routine and systemic espionage platforms against the United States and allies.”

FBI chief Wray also labeled China as a significant counterintelligence threat for the U.S.

“As I look at the landscape today and over the course of my career ... the Chinese counterintelligence threat is more deep, more diverse, more vexing, more challenging, more comprehensive and more concerning than any counterintelligence threat I can think of,” Wray testified before the Senate panel.

Lawmakers and intelligence officials at the hearing grappled with the challenge posed by Huawei and how best to respond.

“It seems to me, they have to decide they’re either going to be a worldwide telecommunications company or an agent of the Chinese government, they can’t be both,” Sen. Angus KingAngus Stanley KingSenate panel approves Interior nominee over objections from Democrats Trump, Europe increasingly at odds on Iran The Hill's 12:30 Report: Dems raise stakes with talk of 'constitutional crisis' MORE (I-Maine) said. “And right now they’re trying to be both, and I think the world’s customers which the Chinese are certainly sensitive to are the best enforcers of that principle.”

Director of Defense Intelligence Agency Robert Ashley replied that he agreed with King’s point. But he pushed back over who has responsibility for the telecommunications firm’s choice to share information with the Chinese government, as national security officials claim it does. And he highlighted the scope of the problem, not just with Huawei but with other Chinese companies.

“That decision doesn’t lie with Huawei,” Ashley said. “It lies with the [Chinese Communist Party], it lies with [President] Xi Jinping and the way that they are starting to centralize greater the management of these businesses.”

“That makes it really problematic for all of those businessmen without providing that information back to Beijing,” he added.