Letter to the Hon. Gene L. Dodaro, Comptroller General of the United States - Hastings Leads Letter Urging Government Accountability Office Review the Effects of President Trump's Trade Tariffs on 5G Deployment

Letter

Dear Mr. Dodaro:

As you know, 5G will be the unifying fabric that connects billions of devices in our homes, cars, offices and communities. Using what are known as "small cells," this technology will provide ultra-fast, low-latency connections to the internet and all other devices on the 5G network, unleashing whole new families of innovative applications and devices. Getting us to this future, however, does come with a cost, mostly in the form of upgrades to hundreds of thousands of pieces of infrastructure and ever-shrinking circuitry that goes into our mobile devices. Telecommunications experts estimate that the number of small cell deployments will quadruple over Long-Term Evolution (LTE) deployments, and the number of devices connecting to this new infrastructure could be ten times more than current numbers. It is estimated that approximately $250 billion dollars of new infrastructure will be needed for a nation-wide 5G deployment over the next few years. At the same time, while 5G has an up-front cost, it has the potential to unleash huge economic benefits as well. I am told the deployment of these new networks could yield as many as three million new jobs and provide a $500 billion boost to the United States economy. It is clear that we cannot delay the rollout of this new technology.

Furthermore, the United States must lead the rest of the world when it comes to this rollout. The United States and Europe face an existential challenge from China over 5G's intellectual property, standards, and patents. Huawei, for example, has research programs to develop alternatives to American suppliers, and U.S. trade restrictions have accelerated China's efforts to develop its own 5G industry. While American companies lead in making essential 5G technologies, the United States no longer manufacturers any of the core telecommunications network equipment related to 5G. Only four companies produce 5G hardware in any meaningful capacity and none are United States-based: Ericsson and Nokia from Sweden and Finland respectively, and two China-based hardware manufacturers, Huawei and ZTE. Given their track records in security, consumer privacy, and reliability, we must not allow Chinese manufacturers to dictate 5G infrastructure to the United States.

President Trump has said that his administration is committed to continued leadership in wireless technology and that the rollout of secure, ubiquitous 5G is a top priority for this nation, but his trade policies do not reflect this priority, and in many cases, actively harm this nation's attempts to stay ahead of the game in 5G. Buried deep inside of the schedule of goods subject to taxes on Chinese imports include "machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus" and "apparatus for transmission or reception of voice, images, or other data, including apparatus for communication in a wired or wireless network." These will serve as the raw materials that technology companies in the United States could forge into 5G hardware. I believe these tariffs are coming at the exact wrong time for us if our goal is to win the race to a 5G future.

Given our concerns, we request that the Government Accountability Office conduct a review of all Trump trade policies including, but not limited to, tariffs that effect the trade in foundational telecommunications equipment. We ask that your evaluation address the following:
If the tariffs are kept in place up through 2020, what additional costs will the United States incur when deploying 5G infrastructure, with an analysis of how it will impact both cities and rural areas?
How do these tariffs affect the competition among 5G hardware manufacturers?
What are the national security implications of our entire supply chain of 5G infrastructure being dependent on foreign hardware manufacturers?
What are the possible conflicts of interest between Hauwei and the Trump Administration?
Please give this request your full and fair consideration. Thank you in advance for your attention to this request.

Sincerely,

Alcee L. Hastings
Member of Congress

Jim McGovern
Member of Congress

Ron Kind
Member of Congress

Yvette D. Clarke
Member of Congress