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Cotton, Sasse, Rubio Demand Answers from DOD on Huawei

January 24, 2020

Washington, D.C. - Senators Ben Sasse (R-NE), Tom Cotton (R-AR), and Marco Rubio (R-FL), members of the Senate Select Committee on Intelligence, wrote to the Secretary of Defense, seeking answers regarding reports that the Department of Defense objected to Commerce Department regulations that would have made it more difficult for U.S. companies to sell to Huawei.

"Huawei is an arm of the Chinese Communist Party and should be treated as such," the Senators write. "It is difficult to imagine that, at the height of the Cold War, the Department of Defense would condone American companies contracting with KGB subsidiaries because Moscow offered a discount. We are concerned that the Defense Department is not appropriately weighing the risks."

The full letter is available here and found below.

Dear Secretary Esper,

We write regarding recent public reports that the Defense Department objected to a proposed change to Commerce Department regulations that would have made it more difficult for U.S. companies to sell to Huawei from their overseas facilities. Given the national security risks surrounding Huawei's technology and operations, concerns which resulted in the addition of Huawei and its affiliates to the Department of Commerce's Entity List in May 2019, we respectfully ask for a member-level briefing on the Department's rationale for its reported objection.

Huawei is an arm of the Chinese Communist Party and should be treated as such. It is difficult to imagine that, at the height of the Cold War, the Department of Defense would condone American companies contracting with KGB subsidiaries because Moscow offered a discount. We are concerned that the Defense Department is not appropriately weighing the risks.

Based on public reporting, pursuant to a Department of Commerce proposal, the Office of Management and Budget circulated a proposed rule change that would reduce the maximum percentage of U.S.-origin content, from 25 percent to 10 percent, in permitted sales to Huawei. This change to the De Minimis Rule for sales to Huawei would have effectively disrupted the supply chain of the Chinese Communist Party's tech puppet, which depends on valuable contracts with American companies. The Department reportedly objected over concerns about how the rule would affect U.S. companies' competitiveness and their ability to continue to invest in research and development which allows the United States to maintain a technological edge over our adversaries.

We respectfully request that within 60 days you provide a briefing to discuss the following:

1. Whether the Department issued a nonconcurrence to the proposed change as publicly reported.

2. The rationale for the reported nonconcurrence, including an assessment of the benefits and costs of the Commerce Department proposal on our ability to maintain a technological edge over our adversaries as outlined in either official memoranda and interagency discussion.

3. How the Department's reported nonconcurrence affects the Department's simultaneous attempts to persuade allies and partners to bar Huawei from their networks.

Additionally, we respectfully ask that you produce or summarize, either in classified or unclassified form, the conclusions in the official memoranda that informed the Administration's consideration of this course of action.

Thank you for your consideration of our request and we look forward to this briefing.

Sincerely,

U.S. Senator Ben Sasse
U.S. Senator Tom Cotton
U.S. Senator Marco Rubio