Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

A Huawei company logo is pictured at the Shenzhen International Airport in Shenzhen, China, on July 22, 2019.

ALY SONG/Reuters

The Trump administration considered banning China’s Huawei from the U.S. financial system earlier this year as part of a host of policy options to thwart the blacklisted telecoms equipment giant, according to three people familiar with the matter.

The plan, which was ultimately shelved, called for placing Huawei Technologies Co Ltd, the world’s second largest smartphone producer, on the Treasury Department’s Specially Designated Nationals (SDN) list.

One of the people familiar with the matter, who favors the move, said it could be revived in the coming months depending on how things go with Huawei.

Story continues below advertisement

The plan was considered by the White House National Security Council, and seen by officials as a nuclear option atop a ladder of policy tools to sanction the company, two of the people said. Such a designation can make it virtually impossible for a company to complete transactions in U.S. dollars.

Administration officials drafted a memo and held interagency meetings on the issue, according to one of the people, showing the extent to which administration officials mulled deploying the United States’ most aggressive sanctioning tool against the Chinese company.

Its use was tabled in favor of other measures, such as placing Huawei on a trade blacklist, which forces some suppliers to obtain a special license to sell to it.

Huawei did not respond to a request for comment. A Treasury spokesperson said the agency “does not comment on investigations or prospective actions, including to confirm whether one exists.”

Huawei would have been among the largest companies ever added to the list, which has included Russia’s Rusal, the world’s second largest aluminum company, Russian oligarchs, Iranian politicians and Venezuelan drug traffickers.

Annie Fixler, a cyber expert at the Foundation for Defense of Democracies think tank, said designating the company “would have broad, widespread implications for Huawei across the globe,” noting that its business would be “severely impacted” in Europe and in Asia outside of China.

The U.S. government has brought criminal charges against Huawei, alleging theft of trade secrets, bank fraud, violations of U.S. sanctions against Iran, and has sought to convince allies to ban it from 5G networks over spying fears.

Story continues below advertisement

But placing the company on the “SDN list” would mean a host of logistical, diplomatic and economic difficulties for the U.S. government.

The designation prohibits American companies or citizens from trading or conducting financial transactions with those listed and freezes assets held in the United States.

Adding Huawei would therefore hammer U.S. allies that already rely on the company for their 4G networks, since almost all dollar payments clear through U.S. financial institutions.

The Treasury could grant licenses to exempt U.S. banks involved in those transactions. But it has generally shied away from doing so, concerned that too many exemptions would blunt the strength of the tool, experts said.

Huawei’s sprawling size, with dozens of subsidiaries, would significantly complicate enforcement and carve-out efforts, experts said.

“The larger an entity is, the harder it is for a U.S. Administration to foresee and prepare for the major effects, foreign and domestic, that placing it on the SDN list may cause” said Matthew Tuchband, a former Treasury official who added that careful consideration is needed before designating a company the size of Huawei.

Story continues below advertisement

Treasury Secretary Steve Mnuchin, who is seen by many China hawks in the administration as sympathetic to Beijing, has rarely overseen the use of the tool against China, designating a handful of Chinese persons for trafficking in fentanyl and over violations of sanctions against North Korea and Iran.

Nevertheless, some lawmakers still see designating Huawei as worth considering.

“Given Huawei’s relentless drive to dominate the 5G landscape, it is one of the most urgent national security threats facing the free world,” Republican Congressman Michael Gallagher said.

“All options should be on the table in order to impose maximum pressure,” he added.

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies