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Comment by jrochkind1 | Hacker News Reader

> Commerce Secretary Wilbur Ross told Fox Business “there has been a very highly technical loophole through which Huawei has been in able, in effect, to use U.S. technology with foreign fab producers.” Ross called the rule change a “highly tailored thing to try to correct that loophole.”

This is very vague. Does anyone understand what they are talking about?

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The “loophole” was this:

“Under the new rule, any foreign company that uses American technology to produce microchips would need a license to sell to Huawei. That makes it difficult for major chip contract manufacturers like Taiwan’s T.S.M.C. to sell to Huawei, because its supply chains rely heavily on American manufacturing tools. It could also clamp down on sales by makers of semiconductor equipment, like Applied Materials and KLA, and chip design software companies like Cadence.”

https://www.nytimes.com/2020/05/15/business/economy/commerce...

I don't really understand why they are requiring a license to sell to Huawei in the first place.

That this is all such a string of vagueness makes me suspect it's a bunch of bullshit, more about politics (in the 'optics' sense) or business competitiveness than actual national security.

Pure speculation...

All of this is about national security. US & Taiwan’s TSMC are in talks to open a TSMC factory in the US. Chairman of TSMC has publicly stated if the US gives them enough money, they’ll do it. Appears US (Trump) is telling TSMC if they do not open the factory for free, they’re going to have trouble making money at all. Taiwan wants to keep TSMC because it’s an insurance policy, China & the US both need TSMC. That or it is a plausible way for TSMC to deny they’re cutting off China.

...any thoughts?

Hm, I think you and I mean a different thing by 'national security'. I think of, like, spying, or trying to insert malicious vulnerabilities in software (attack), etc.

Like maybe if Huawei were accused of being used by the Chinese government to spy on America, it would make sense to require a license to sell tech to Huawei. (I have sometimes seen it accused of such; I have no idea how credible such accusations are; but this is an example of what 'national security' means to me, particularly in regard to requiring licenses to do business with a particular company).

You seem to be talking about whether TSMC gets a federal subsidy or not to open a factory or not as 'national security'. I mean, I get how the general economic environment has 'national secuirty' implications; how the future access to semiconductor market has 'national security' implications. But if that's "national security" it seems like the entire economy is "national security", and "national security" doesn't actually mean anything. Especially when Huawei is being penalized for concerns about a different company?

With that understanding of national security, is there any aspect of international trade negotiations that isn't "national security", or any international trade measure that can't be said to be "justified by national security"? Do you have an example of any international trade measure (a tariff, an embargo, a subsidy, a penalty, a ban, any method of one nation trying to get an economic/trade advantage over another) that you do not think would be "national security" related under this understanding? Is there such a thing?

Among other things, it's another reminder that the era of legal-norms-based international trade has been brought to an end...

All national security has a cost, access to TSMC is obviously national security issue, and appears US is positioning itself to reduce the cost of access to TSMC and increase it for China.

National security is an ends, not a means; its ultimate form is shapelessness, not a strict definition.

I'll ask again, is there any example of international trade dispute/conflict that would not be about 'national security' with this understanding? Can you give one? Or does this intentionally and consciously reconceptualize all attempts to get advantage in international trade, or a business advantage for domestic corporations over foreign ones, as 'national security'?

Here’s a recent example:

https://www.csis.org/analysis/wtos-first-ruling-national-sec...

Can you explain that example in your own words, and what you think makes it not an issue of national security? Or is your position just, hard to say, whatever the WTO says?

What the WTO determines has changed over time, and can depend on the balance of power. The WTO knows that if it keeps making rulings that countries just ignore, it loses power and legitmacy, it has to try not to push too hard.

But your opinion is whatever the WTO decides is correct?

To me, if the penalties against Huawei are really about negotiations over a government subsidy for a TSMC plant, I'd expect the WTO to rule against the US, if it was playing 'fair'. Which doesn't mean it will.

Here's an example of the WTO ruling against the US in a trade dispute with China, and the US retaliating to try to weaken the WTO.

https://www.ft.com/content/131a55ea-a84a-11e9-984c-fac8325aa...

Here's an expert writing on "Why Limiting U.S. Tech Exports to Chinese Companies Like Huawei Is a Risky Strategy",

https://itif.org/publications/2019/05/23/why-limiting-us-tec...

China has been working on challenging actions against Huawei specifically at the WTO; although it has to be careful because they know the WTO's rulings can be effected by politics, and the US (especially current administration) may not abide by the WTO ruling anyway, they need to try to remain on good terms to avoid escalating trade war, regardless of what the WTO might ultimately rule (which can take a while too).

https://www.forbes.com/sites/zakdoffman/2019/05/29/huawei-go...

There is not. In more peaceful times smaller trade disputes can be seen as having no national security relevance. But otherwise international trade absolutely is of relevance to national security. And that's as true for perennial exporters as for perennial importers.

> Hm, I think you and I mean a different thing by 'national security'. I think of, like, spying, or trying to insert malicious vulnerabilities in software (attack), etc.

Supply chain security is also part of national security. Economic (in)dependency is also part of national security. Economic well-being and competition is also part of national security. There's more to national security than espionage and military capabilities. You don't have to agree -- it doesn't matter if you don't because the people work in the national security apparatus do think that national security encompasses all of that and more, and their opinion matters a hell of a lot more than your typical HN commenter's (mine included).

They require licenses because the US government has placed sanctions on Huawei but allows exceptions to license holders.

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