30 Attorney Generals on verge of announcing Google probe – sources

Sources familiar with the matter have suggested an antitrust probe involving more than 30 State Attorney Generals could be launched as soon as next Monday.

Although the specifics of the investigation are yet to make it into the public domain, the threat is looming large for Google. Three separate sources have suggested Google is in the crosshairs, according to the Washington Post, another incremental step in the US as lawmakers look to dilute the power and influence of one of Silicon Valley’s poster boys.

Comments are difficult to come by, though lawyers are seemingly ready to down weapons and reach across the political divide to address a growing debate. Bickering politicians can usually be relied on to be lethargic and ineffective, though it seems Silicon Valley is antagonising Washington enough to force friendships in an increasingly hostile and partisan political climate.

That said, it would surprise few if the investigation is officially launched next week, as there have been various public offices stating their disapproval over the power and influence Google wields.

The crux of the issue is a simple one; should a company like Google be able to access such vast amounts of information. If data is the new oil, Silicon Valley is OPEC. Combining this potential gold mine with the already bulging bank accounts could create a worrying position.

One question which remains is how responsibly companies like Google are exerting this power. Are the internet giants fuelling campaigns of defensive acquisition, swallowing up potential competitors to prevent a dilution of market share? Are initiatives being implemented to prevent growth of these rivals and kill an idea before it can even consider scaling? These are areas which could be deemed monopolistic, an abuse of a dominant position, a big no-no in today’s world.

The monopolistic accusations are just a single element of the mix though. Conservative voices have suggested the left-leaning internet giants are demonstrating bias, offering prominence to some political commentary and hiding certain opinions.

“If big tech companies are not living up to their commitments and representations regarding being open to all political viewpoints and free of bias and restrictions on the basis of policy preference, then they should be held accountable for their false, misleading and deceptive trade practices,” said Texas First Assistant Attorney General Jeff Mateer.

Mateer and the Texas Attorney General office believe Google has been restricting the advertisement of some Republican political events, while Facebook has been censoring pro-Trump articles and Twitter limited the visibility of Republican politicians. These are unproven claims right now, but they demonstrate the ‘us’ and ‘them’ mentality which is a common theme though the relationship between Silicon Valley and Washington.

For the politicians, the perceived preference of the internet giants on political matters is another reason power and influence should be diluted. An antitrust investigation, gathering 30 Attorney Generals behind the same cause, could be one way to tackle the problem.

Another area which is unclear is the extent of such a probe. Google has been named as the party of interest in this report, though it would surprise few if the likes of Amazon, Twitter or Microsoft were dragged into the fray also; Silicon Valley is increasingly becoming Enemy Number One in Washington.

Twitter and Facebook move to block Chinese state-backed disinformation campaign

US social media sites have announced coordinated action designed to counter a propaganda campaign apparently designed to undermine the Hong Kong democracy protests.

Twitter was the first site alerted to this activity, with some users flagging up sponsored posts from state-run media that seemed biased against the mass gatherings in Hong Kong that are protesting moves to give the Chinese state greater power over the semi-autonomous region.

Twitter also published a blog post titled Information operations directed at Hong Kong, in which it said “We are disclosing a significant state-backed information operation focused on the situation in Hong Kong, specifically the protest movement and their calls for political change.” This took the form of almost a thousand phoney accounts apparently designed to amplify messaging undermining the legitimacy of the Hong Kong protests, which have now been suspended.

Removing any doubt about censorship activity being coordinated between internet giants, Facebook then announced it is acting on a tip from Twitter to remove a few accounts suspected of ‘inauthentic behaviour’ from China. “Although the people behind this activity attempted to conceal their identities, our investigation found links to individuals associated with the Chinese government,” said the Facebook announcement.

Lastly, while not explicitly referring to China, this propaganda campaign has clearly prompted Twitter to announce it will no longer accept advertising from state-controlled news media entities. Somewhat belatedly is has dawned on Twitter that state-controlled media is sometimes a tiny bit biased towards the state that controls it, which can have direct political consequences. Who knew?

Meanwhile US President Donald Trump is persisting with his claims that Google exerted some deliberate influence against him in the 2016 US general election. He cites an unspecified report that claims up to 16 million votes were manipulated in favour of his opponent Hilary Clinton in the election and called for Google to be sued.


Clinton herself has unsurprisingly queried the validity of the claim by attacking the, still unspecified, source. A number of other media have also criticised the presumed source of the claim, most of which make no secret of their antipathy towards Trump. As ever Trump’s tweet will have an underlying tactical purpose, in this case to threaten Google and any other internet company that maybe tempted to use its platform to favour his 2020 opponent.

US Security Advisor lands to rub shoulders with BoJo

US National Security Advisor John Bolton has landed in the UK over the weekend to attend various meetings over the next two days, and its not difficult to imagine what is on the agenda.

Bolton has been a regularly featured name in Republican Presidential administrations since the early 80s and is credited with being one of the more hawkish members of the current ruling mob. With Brexit a key concern for many parties around the world, the up-coming deadline is likely to feature in many conversations, though with the newly-appointed Prime Minister available for coaxing, China and Iran will also feature heavily.

Prime Minister Boris John is somewhat of an unknown entity in recent months. BoJo has never been far away from Brexit headlines, but after an exit from the Foreign Department in 2018, other comments have been largely immaterial. During the Conservative Leadership campaign, BoJo was kept under control by the PR gurus, with many assuming public engagements would likely do more damage than good to leadership ambitions. This does create somewhat of a void when it comes to the stance against China.

This is an area where BoJo has remained relatively quiet. Of course, there has been the odd outburst and political PR plug, but the relationship with China during the Johnson leadership is still relatively undefined. This could be seen though the latest update on the on-going Supply Chain Review.

During the Supply Chain Review update last month, then-Secretary of State Jeremy Wright gave little-to-no details on the Government stance. Legislative updates were promised, and homages paid to the value of increased supply chain diversity, but no decision, or suggestion of, on the role of Huawei in the UK were offered. Reading between the lines, Wright did not want to stick his neck out when a new PM was on the verge of being appointed.

Where BoJo sits is an unknown entity.

BoJo has made some big promises on the campaign trail for the leadership position, while he still has to deliver on the big Brexit claims made three years ago. Some of these were built around the idea trade negotiations would be simpler outside of the European Union, suggesting China would play a role in the post-Brexit future of the UK. This contradicts the US relationship however.

The Trump administration is very anti-China, with Huawei absorbing the largest damage in this prolonged trade-conflict. BoJo is somewhat of a pet favourite of President Donald Trump, however it will be interesting to see whether the ego-stroking with be returned from Number 10. Downing Street.

With Bolton in town, it is not difficult to imagine how the conversations with evolve. Bolton is a constant critic of the European Union, labelling the bureaucrats ‘EUroids’ in one of his books. His aggressive stance against China has been clear over the last few months, and we suspect this will continue through discussions over the next couple of days.

The decision on Huawei in the UK is still hanging in the balance. Bolton is very well-placed to nudge the UK towards a more strident position against China, though how healthy this is for the UK remains to be seen. The next couple of days might offer some interesting insight to the BoJo administration and the UK’s position in the international conflict which has dominated headlines for months.

CityFibre jumps on the BoJo bus

With Boris Johnson (BoJo) settling into his new home in No.10 Downing Street, CityFibre is one of the first telcos to champion the office of the blonde bombshell.

“As the original champions of full fibre in the UK, we are delighted to see the new Government recognise the vital importance of rolling out this transformational infrastructure, and we stand ready to work with Government to help achieve this vision,” a CityFibre spokesperson stated.

The UK is now entering into the realms of the unknown, though there is one thing which we can be certain of over the next few months; politics is going to have a very different taste with BoJo at the helm. We couldn’t imagine a character more perfectly opposite to former-Prime Minister Theresa May, at least not in the Conservative party anyway.

“Full fibre connectivity is key to introduce a new generation of services, catalyse innovation, promote creativity and drive the economic and social development of the UK,” the statement continues.

What will be interesting to understand is whether the 100% penetration of full-fibre broadband services by 2025, a target hyped by BoJo over the last few weeks, is a genuine ambition or hot air. History has told us that BoJo has a tendency to get a bit over-excited when it comes to facts and figures, and this one might be a little ambitious.

The only certainty is change. BoJo will likely be more aggressive when it comes to Brexit and probably more pandering when it comes to the relationship with the US. BoJo is somewhat of a pet favourite of US President Donald Trump, fighting with former-UKIP leader Nigel Farage for most loving strokes from the Commander in Chief.

Some might say this is a good position for the UK, with Brexit forcing the Government to look further afield for lucrative trade deals, though the Huawei saga will continue. The Supply Chain Review announcement left no-one with clarity over the UKs position, though with BoJo’s White House relationship it might spell trouble. The can has been kicked down the street and it has landed firmly in BoJo’s office.

After a 24-hour period which some media sites have been describing as a ‘Cabinet Massacre’, the industry will also have to get to grips with a new Secretary of State for Digital, Culture, Media and Sport. MP for Loughborough Nicky Morgan has assumed control of the department, and her CV can tell you why…

After working as a corporate lawyer at Travers Smith specialising in mergers and acquisitions, Morgan moved in-house to corporate law and was then elected as an MP in 2010. Since that point, Morgan has as the Economic Secretary to the Treasury, Financial Secretary to the Treasury, Minister for Women and Equalities, Secretary of State for Education and Chair of the Treasury Select Committee.

Looking through the ‘They work for you’ website, Morgan has not contributed to any discussions which concern technology, media or telecommunications in recent months. An interesting choice for DCMS and an interesting couple of months in store as Morgan gets herself up-to-speed.

Breaking down the Supply Chain Review Statement

Although there was very little said during the Supply Chain Review statement yesterday, there are some interesting developments worth keeping an eye on.

Speaking to the House of Commons, Secretary of State for the Department of Digital, Culture, Media and Sport Jeremy Wright did as most expected he would and dodged the Huawei decision. Although we were promised a decision by March, the slippery politician has managed to create enough breathing room to get him through to September.

Despite some being disappointed by a lack of clarity on the competitive landscape for UK communications infrastructure, there were a few takeaways.

There’s no avoiding interference from Transatlantic geo-politics

Every politician will tell you decisions are made dependent on what is best for the British people alone, but it is impossible to avoid the US here. The White House and its aggressive policies are causing havoc around the world, including here in the UK.

Fundamentally, without a decision on Huawei there is no clarity for investment and progress into the digital economy will falter.

Wright said a decision on Huawei would be made irrespective of the political influences of the US, but US interference is unavoidable.

“The hon. Gentleman has said that he is concerned to ensure that this should be a decision about the interests of the UK and not the priorities of the US Administration, and I understand that,” Wright said in response to the suggestion the US has too much influence from Tom Watson, Shadow Secretary of State for Culture, Media and Sport.

“I can give him the assurance that decisions we take will be decisions in the best interests of the United Kingdom, but he knows that this is a hugely interconnected sector and it simply is not possible to make sensible judgments about telecommunications without recognising those interconnections.”

With Huawei being placed on the Entity List the performance, resilience and security of its products might be impacted in the future. Wright has said he will not make a decision on Huawei until he has all the facts, and the relationship between China and the US is a huge factor in this.

Kicking the can to avoid irritating the new boss

Despite there being pressure from influential Parliamentary groups and the telco industry to make a decision, it was always highly unlikely Wright was going to say anything until his new boss has taken residence in No.10 Downing Street.

Boris Johnson is the new Prime Minister and he will want to put his own mark on proceedings. The Huawei decision is an important one, not only for UK 5G infrastructure, but because it will impact the relationship with the US. BoJo has already shown himself as somewhat of a pet of the President and will most likely want to nurture this relationship as only he knows how.

Wright does not want to jump the gun on making a decision and potentially irritating the new boss, especially when there is a potential promotion around the corner.

David Guake, the Justice Secretary, has resigned. Education Minister Anne Milton has gone. Chancellor of the Exchequer Philip Hammond has publicly stated he would quit if BoJo won. Rory Stewart, the Secretary of State for International Development, formally announced his resignation over Twitter at 11.18am. And finally, it is highly likely Foreign Secretary Jeremy Hunt, BoJo’s opponent for PM, will be shifted elsewhere.

“The reality is that this statement is just a lot of words to confirm further delay. Why are the decisions now being left in the gift of the new Prime Minister? Is this just another case of putting the Tory party before the country?” SNP MP Alan Brown questioned.

As one of the few politicians who managed to remain neutral during the proceedings, Wright could find himself heading up a new department before too long.

Security framework will make UK more secure

This is perhaps the most encouraging snippet to emerge from a relatively shallow statement overall; security requirements will be heightened for everyone.

“Fundamentally, we must make a decision on the basis of what is in our security interests, but he is also right that if we were to focus solely on one company or country, we would miss the broader important point that our telecoms supply chain must be resilient and secure, regardless of where equipment comes from, because risk may transfer from place to place and our population is entitled to expect that the approach we take puts security at its heart, wherever the equipment comes from,” Wright stated.

Although there are few details available regarding the new security requirements, Wright has suggested there will be a more stringent framework set in place and on-going assessments to ensure standards are being maintained. This will be applicable to every supplier, irrelevant of where they have come from.

To start with, this will be a voluntary scheme for the telcos, but soon enough it will be cemented in place through legislation. This takes time, but it is encouraging that the Government recognises threats can come from anywhere, everyone has a globalised supply chain and cybercriminals are becoming much more capable.

If policies have the position of 100% secure is impossible and everyone is a potential threat, risk mitigation levels should be set higher. This is the best possible means to achieve a resilient and secure network, capable of dealing with threats irrelevant as to their origin or intention.

Vendor diversification is nothing but a smokescreen

It might sound like a wonderful plug, but suggesting the UK is going to encourage diversification in the supply chain is nothing but a distraction to attract PR points for DCMS.

“In addition, we must have a competitive, sustainable and diverse supply chain if we are to drive innovation and reduce the risk of dependency on individual suppliers,” Wright said.

“The Government will therefore pursue a targeted diversification strategy, supporting the growth of new players in the parts of the network that pose security and resilience risks. We will promote policies that support new entrants and the growth of smaller firms.”

During the statement, Wright promised work will be done to enable smaller and more innovative players to contribute to the 5G euphoria. This sounds good and, in theory, addresses a long-standing problem in the telco world, but let’s not get ahead of ourselves.

The telco industry has been attempting to create a more diverse supply chain for years, as well as adapting procurement models to ensure smaller companies can weave through the red-tape maze. There has been little progress to date and intervention from DCMS is unlikely to reap any material changes.

You also have to wonder whether Wright is tackling the challenge head-on. Wright pointed to funding which has been directed towards the West Midlands and other innovation hubs, however this is not the problem which the telco industry has been facing. The limited supply chain is most harmful in places like the access network or core. This is where there are so few suppliers and competition has been impacting the cost of deployment.

Wright might be encouraging diversification and growth for start-ups, but don’t be fooled by this statement; he is not directly tackling the biggest competition challenge the industry faces.

Long-overdue legislative overhaul and Ofcom empowerment

The legislative and regulatory landscape has needed an update for years and Wright is promising one. Not only would this put the security framework into law, it will also ensure Ofcom has the right powers to be effective in the digital economy.

“We will pursue legislation at the earliest opportunity to provide Ofcom with stronger powers to allow for the effective enforcement of the telecoms security requirements and to establish stronger national security backstop powers for Government,” Wright said.

Until the new legislation is put in place, Government and Ofcom will work with all telecoms operators to secure adherence to the new requirements on a voluntary basis.”

Many of the rules which govern the telecoms and technology industry have been written for a bygone era. This is an outcome which is largely unavoidable when you consider the speed at which progress develops nowadays. However, rules need to be brought into the 21st century.

Legislation will offer the Government more influence over commercial communications infrastructure while Ofcom will have its teeth sharpened. It’s a long-overdue update.

Not much said, but potential to progress

Overall, there was little said by Wright in terms of material progress, but there is enough evidence the UK is creeping forward toward contextual relevance. We saw hints of progress yesterday, but realistically, the new Prime Minister and his administration will dictate evolution over the coming months and years.

‘No technical grounds’ to ban Huawei says UK Parliament committee

Chair of the Science and Technology Committee in the UK, Norman Lamb, has stated there is not enough technical evidence to ban Huawei and is demanding a final decision by the end of August.

In a letter written to Jeremy Hunt, Secretary of State for Digital, Culture, Media and Sport (DCMS), Lamb has demanded a conclusion to the Supply Chain Review which has staggered the progress of 5G networks in the UK. Many in the industry have become increasingly frustrated with the state of purgatory which has loomed over the UK telecoms industry, and now the influential Science and Technology Committee has had enough.

“Following my Committee’s recent evidence session, we have concluded that there are no technical grounds for excluding Huawei entirely from the UK’s 5G or other telecommunications networks,” said Lamb.

“The benefits of 5G are clear and the removal of Huawei from the current or future networks could cause significant delays. However, as outlined in the letter to the Secretary of State for Digital, Culture, Media and Sport, we feel there may well be geopolitical or ethical considerations that the Government need to take into account when deciding whether they should use Huawei’s equipment.”

This is the interesting aspect of the letter to Wright. Lamb is effectively telling DCMS and the National Cyber Security Centre (NCSC) to hurry up and make a decision, but not to come to a conclusion too quickly as there are ethical and political considerations to account for. It’s a bit of a mixed message, but a deadline is perhaps overdue for this saga.

The message from Lamb is relatively simple; there are no technical grounds to ban Huawei. Quoting the NSCS’ assumption that 100% secure is impossible, suggesting a lack of concrete evidence against Huawei espionage, reasserting legal obligations placed on telcos to maintain security and pointing towards the international nature of supply chains nowadays are all points made by Lamb to suggest Huawei should be allowed to contribute to network infrastructure.

There are of course concessions make in the letter. Lamb is suggesting Huawei should be excluded from contributing to the network core, while there should also be a mechanism introduced to limit Huawei should it fail on-going competency tests and security assessments, but the message seems to be focused on the idea that Huawei is no more of a security threat than any other organization.

“Supply chains for telecommunications networks have been global and complex,” the letter states. “Many vendors use equipment that has been manufactured in China, so a ban on Huawei equipment would not remove potential Chinese influence from the supply chain.”

Another interesting point raised by Lamb is the legal obligation which has been placed on the telcos to ensure security. Communications infrastructure is a key component to today’s society, but the telcos are the ones who will suffer some of the greatest consequences for poor risk mitigation and due diligence. None of the telcos have raised concerns of an increased security risk from Huawei, and this should be taken as some of the most important evidence when considering the fate of the Chinese vendor.

Ultimately, this is action from the Government. It might kick-off some bickering between the parties (Lamb is a Liberal Democrat) and between departments, but finally someone is forcing DCMS and NSCS into a decision. It seems Lamb is not concerned about the distraction of a party leadership contest or Brexit, he simply wants an answer by the end of August.

Interestingly enough, this letter also forces DCMS into basing the outcome of the Supply Chain Review on politics. By stating there are no technical grounds for a ban, should Wright and his team want to exclude Huawei it will have to be done for another reason. Lamb has asked DCMS to consider the ethical and political weight of a decision, as well as the impact it might have on relationships with allies.

This is now a very difficult decision for DCMS. Lamb has seemingly taken technical considerations off the table; any ban would have to be political.

Ren’s back to tell us how Huawei is starting to ditch the US

Huawei founder Ren Zhengfei appears to be little more than a celebrity spokesperson nowadays, but a recent interview suggests the vendor is just fine with its US shunning.

Speaking to the Financial Times, Ren has once again been called into action to address the tensions between China and the US, as a result of which, Huawei has become a prime target for anyone hoping to inflict damage on the worlds’ second largest economy. The message from Ren is relatively simple; we’re doing OK and we’ll move away from US suppliers.

Such comments will certainly set off alarm bells in the offices of some US semiconductor firms, but it should hardly come as a surprise. The ‘Made in China 2025’ strategy might be unpopular with the US and Europe, but it is by no-means a secret.

‘Made in China 2025’ is an initiative set into action by Chinese Premier Li Keqiang during 2015. Through this initiative, the Chinese Government wants to evolve the perception of the country, ditching the ‘world’s factory’ tagline and moving up the value chain towards higher value products and services. The Government will be contributing $300 billion to the project to enable China to compete with the US.

This plan has been heavily criticised by the US for a number of reasons, but ultimately it all boils down to one; this is a genuine threat to the technological domination of the US on the global scene.

Of course, there are plenty of reasons not to like the idea. Some have suggested it violates the World Trade Organization (WTO) rules on self-sufficiency. Others have said trade secrets have been stolen from foreign companies or unfairly obtained through forced joint-ventures. For ‘Made in China 2025’, companies have to move up the value chain, targeting growth industries such as AI or medicine, and these smarts have to come from somewhere.

However, you always have to bear in mind the end-result irrelevant of path taken to get there. If ‘Made in China 2025’ succeeds, the US will no-longer be the dominant force in the technology world, and other economies could be shattered if China replaces imported goods with domestic.

In the latest interview, Ren is suggesting that even if there is a reprieve from President Donald Trump following the G20 summit last weekend, Huawei will continue to move its supply chain out of the US. Perhaps this is the catalyst which was needed to kick the ‘Made in China 2025’ concept up another gear.

“The US is helping us in a great way by giving us these difficulties,” said Ren. “Under external pressure, we have become more united than ever.

“If we aren’t allowed to use US components, we are very confident in our ability to use components made in China and other countries.”

Although there has been a concession from Trump with regard to the ban facing Huawei, some might view this pardon with scepticism. The President’s opinion seems to change more often than the tides so why would any organization pins its hopes and aspirations on the door of the Oval Office. Instead of a power demonstration, the US seems to have pushed the Chinese further towards autonomy.

While it is far from confirmed, we strongly suspect the huffing and puffing from the White House was little more than a demonstration of power. Huawei’s entry onto the Entity List might have been an aggressive move to gain the upper-hand in trade talks with the Chinese; look what we did to ZTE last year, the US appears to be saying, so play nice or we’ll do the same to Huawei.

But it doesn’t seem to have worked; Huawei is still alive and still OK, if you listen to Ren.

How OK Huawei actually is remains to be seen. Ren has been wheeled out to put a positive spin on the situation, but the picture is rather gloomy. Smartphone shipments are set to decline by 40-60% over the remainder of the year, Google hasn’t said it is once again on friendly terms with Huawei despite Trump’s amnesty, and some have questioned whether China is capable of filling the semiconductor hole created through the China/US vacuum.

Huawei has done a lot to add diversity to its supply chain in recent years, while also moving numerous operations to its own fabless semiconductor company HiSilicon, but can it satisfy its appetite for more specialised components? Huawei works with a number of US firms who have niche operations, Qorvo supplies radio-frequency systems and solutions for Huawei for example, and when it comes to specialised components, the US rules the world.

For certain segments of the semiconductor industry, field programmable gate arrays as another example, and China has not been able to replicate the US success just yet. Despite what Ren says about moving Huawei’s supply chain out of the US, it will still be reliant for some incredibly important cogs.

One way of viewing this situation is that there is a short-term demonstration of power. Without the likes of Xilinx, Qualcomm, Qorvo, NeoPhotonics and numerous other semiconductor businesses, Huawei cannot produce the products it is promising customers. Not yet at least.

But long-term, perhaps this approach is simply forcing ‘Made in China 2025’ to accelerate and eroding the control the US has globally over some very high-value, highly profitable segments. Prior to the trade war, US companies were inside the tent. Admittedly conditions were not perfect, but they were inside not outside.

Perhaps this is the watershed moment; companies are going to be forced out as companies like Huawei increasingly look for domestic suppliers, and once they find them (by luck, convenience or necessity) there is no coming back.

Trade deal on the cards if Trump leaves Huawei alone

For weeks and weeks there has seemed to constantly be new stories to write about the US/China trade war, and on the eve of the G20 meeting, the dynamic duo haven’t disappointed.

This week, representatives of the 20 richest countries around the world will meet in Japan to discuss everything from fishing regulations through to finance and climate change. Telecommunications, and more specifically cybersecurity, will of course be on the agenda, and most importantly, it will feature in the meeting between President Donald Trump and President Xi Jinping.

Of all the bouts over the next couple of days, this will be the one everyone is paying attention to. The leaders of the worlds’ two largest economy, duking it out to gain supremacy. Trump has said he wants a trade deal, and so has Xi. These two nations not getting on is no good for anyone, but it seems neither wants to appear as weak and concede ground.

The latest development is coming out of Beijing. Xi has stated he is open to a trade deal between the two nations, but Trump would have to stop targeting Huawei as a proxy for passive and active aggression against the Chinese Government.

This is going to be a massive ask from the Chinese premier, as while Trump is fully willing to use companies as pawns in his greatest negotiation, the supporting cast in Congress might not be as willing. We’ve already seen this during the ZTE saga.

It might seem like a lifetime ago, but it was in mid-2018 ZTE found itself in the crosshairs of the White House. Trump built up the situation, seemingly as a demonstration of the power of the Oval Office, and once the point had been made he tried to stand down. But Congress stood in the way.

26 Senators, somewhat hardliners, attempted to block the de-escalation from Trump. They seemingly bought into the evil stories told by Trump as validation for such actions and weren’t willing to let the company off the hook. Trump wanted to play a game with ZTE as movable piece, but Congress wasn’t reading the rule book.

The same situation might happen here. Opinion in the US has been directed towards Huawei being the weapon of Chinese oppression on the world, and Trump has been the most vocal when it came to hyping the fear. Even if Trump does want to step down from this position to facilitate a deal, Congress might once again prevent him.

Trump seems to have done a good job in convincing politicians of the national security threat, and Congress does not seem to have the same game-playing attitude as Trump; if something is a national security threat, it will remain one. The opportunity of commercial gain will not change that.

This is of course assuming Trump wants to make a deal. Xi has played his hand, set out his demands with Huawei, and Trump seems to be just as combative. In interviews and tweets, the President has condemned Canada for tariffs on agricultural products, slammed India for its own tariffs and suggest China’s economy is ‘going down the tubes’.

Currently we have two Presidents who do not seem like they are going to shift. In their homelands they have created personas of strength, leaning on hawkish strategies not diplomacy. It would be fair to assume a continuation of the status quo.

Silicon Valley rallies against Washington over China tariffs

‘Make America Great Again’ might be the slogan pinned to anti-China aggression from the White House, but Silicon Valley is creating a tsunami of discontent against the short-sighted policies.

The Office of United States Trade Representative (USTR) has opened up for public comment regarding a new wave of tariffs to be placed on Chinese exports. While this will generate additional income for the US Government, anyone who believes these actions will not be reciprocated by the Chinese Government is probably fooling themselves.

For months, President Donald Trump has seemingly held a belief he can do whatever he chooses without repercussion, and the industry has largely stood-by with little action or objection. But no-longer, the list of comment submissions is growing by the hour, and there are some pretty big names to take notice of.

In one statement, Intel, Microsoft, HP and Dell Technologies have jointly submitted an opinion suggesting the laptop industry will be under-threat. The team point to price increases for US consumers and businesses, while also claiming the action would weakening the competitive edge these companies have on the international market.

“At the same time, the imposition of tariffs on such products would not address the underlying Chinese trade practices that USTR’s investigation seeks to remedy,” the submission states. “Instead, the tariffs will harm US technology leaders, hindering their ability to innovate and compete in a global marketplace.”

Price is of course a concern to these businesses, as the consumer electronics segment is one which operates under the cloud of low margins and high costs. With the threat of Chinese retaliation on the horizon, costs could be about to soar. With this in-mind, the team would the proposed tariffs to be amended with a horde of exemptions.

And when there are increased costs, there are fewer profits and therefore less money to spend. The jobs category is one which could be under-threat.

“While we appreciate the Administration’s efforts to address longstanding issues the software and other innovative industries face in China, we are concerned that the proposed modification will significantly and negatively impact economic growth, jobs, and innovation,” said Tommy Ross, Senior Director of Policy for The Software Alliance. “The proposed tariff increases will raise costs and reduce competitiveness across the international software industry and beyond.”

According to Ross, the software industry employs 2.9 million US citizens directly, while supporting a further 10.5 million indirectly. The tariffs threaten profitability and the ability for the firms to hire. This may well have a negative impact on growth as well as innovation.

On the handsets and devices side of things, there are of course numerous comments from a range of different parties. John Shane of Fitbit is requesting the USTR remove HTSUS

subheading 8517.62.0090 from the tariff list, as this would cause economic harm to his firm and its competitors, while also having the perverse effect of advancing primary Chinese

objectives under Made in China 2025.

Roku is another which has objected, suggesting Section 301 could negatively impact its ability to capitalise on the opportunity it has with the Roku Operating System. Roku has emerged as somewhat of a challenger to the traditional TV market, with 54% of Roku users not utilising traditional linear TV. This is an emerging segment, though Jim Lamoureux argues the tariffs would inhibit innovation and impact Roku’s ability to lead globally in this potentially profitable segment.

This is the greatest danger of the USTR actions against China with these tariffs; retaliation from the Chinese Government might ensure the damage inflicted on US firms and the prospects of the wider US economy in the international markets would exceed the benefits.

Then you have to consider the impact the White House’s actions will have on allied nations.

“While the USTR has a vital role vis-àvis China, the proposed tariffs could unwittingly affect products made by American, European, Japanese, South Korean, Taiwanese firms and firms from countries of non-offending origin – the very countries with whom the US wants to strengthen trade going forward,” said Roslyn Layton of the American Enterprise Institute.

In her comment, Layton has voiced support for the actions, though seems to encourage more thought when it comes to the law of unintended consequences. Layton seems to be encouraged by firm position the USTR is taking in opposition to China but questions the effectiveness of its current path.

You have to wonder how much collateral damage the US Government is prepared to stomach in its crusade against China. We strongly suspect it does not care in the slightest that a firm of a couple of hundred people are negatively impacted, NeoPhotonics has been crippled by losing Huawei as a customer, but when the tech giants start to get twitchy politicians might start taking notice.

Layton also pays homage to the international allies of the White House. Trump has not exactly been collecting compliments on his diplomatic strategies over the last couple of years, and should the tariffs directed at China have negative impacts on its trade partners, we can imagine strained relationships would be put under further pressure.

All of these businesses are requesting exemptions from the tariff list, but also question the logic behind the decision. There is going to be collateral damage and friendly-fire, though you also have to question whether the strategy is going to satisfy the desired aims.

What is also worth noting is that we are only focusing on the technology segment here; there are more than 2,000 comments so far on a very wide range of topics, industries and verticals. A large number of these submissions are calling for exemptions on the products, components or services which are deemed critical to their work. We suspect if you go through every comment, every item on the tariff list will be mentioned by someone, somewhere.

There are still a flood of questions and concerns which need to be addressed by the USTR, though one which we are interested in is who the US Government will choose to wear the collateral damage. Some exceptions will be granted, and some requests will be ignored. The USTR has to decide which industries to protect from the trade-war and which are going to sacrificed for ‘the greater good’.

US politicians alarmed by Facebook’s cryptocurrency masterplan

The announcement of a new currency led by Facebook has caught the attention of US law-makers and not in a good way.

The Chairwoman of the House Financial Services Committee, Maxine Waters, is alarmed by the prospect of a massive company with a patchy track record when it comes to data protection and censorship having control of a global currency. She published the following statement on the matter soon after the unveiling of Libra.

“Facebook has data on billions of people and has repeatedly shown a disregard for the protection and careful use of this data,” said Waters. “It has also exposed Americans to malicious and fake accounts from bad actors, including Russian intelligence and transnational traffickers. Facebook has also been fined large sums and remains under a FTC consent order for deceiving consumers and failing to keep consumer data private, and has also been sued by the government for violating fair housing laws on its advertising platform.

“With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users. The cryptocurrency market currently lacks a clear regulatory framework to provide strong protections for investors, consumers, and the economy. Regulators should see this as a wake-up call to get serious about the privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies.

“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action. Facebook executives should also come before the Committee to provide testimony on these issues.”

Waters isn’t the only representative to express concern and at least one Senator has joined the party, as you can see in the tweet below. Regulators are going through a period of realising they were very slow to acknowledge the magnitude of social media and they should be keen to show they’ll be less complacent about money than they were information. It seems likely that Facebook will have to jump through a lot more hoops to launch this product than it has had to previously.