Something Strange Is Happening at the Commerce Department — and across the Biden Administration

Commerce Secretary Gina Raimondo told the Wall Street Journal that she sees one of her responsibilities as promoting U.S. business engagement with China. “I actually think robust commercial engagement will help to mitigate any potential tensions,” she said in an interview published this morning.

That’s troubling for a number of reasons.

First, the Biden administration seems to be accommodating Beijing on a number of fronts. Raimondo’s comments on boosting U.S. business engagement with Chinese firms come as the Biden administration reportedly nears a deal with Huawei to drop U.S. charges against the company’s CFO, whose extradition from Canada the Trump administration sought over sanctions-evasion charges.

In a few short years, Commerce has become key to executing U.S. efforts to combat Chinese technological threats. This is mainly because Raimondo presides over an export-control blacklist, called the entity list, that prohibits Americans from transacting with designated Chinese companies, thus isolating them from benefitting from U.S. technology.

The most prominent example of a listed firm is Huawei, which since the start of Trump-era efforts to push back against the company’s global advances has seen cratering revenue — in fact, today, the company’s chairman announced that its smartphone business will generate $30-40 billion less than it would have in the absence of U.S. sanctions.

To be sure, Raimondo didn’t hint at a rollback of Trump-era sanctions on Chinese firms — and she told the Journal that she considers Huawei a “security threat” to which Commerce would keep applying pressure. But her team recently approved the sale of chips to Huawei’s smart-car business in licenses reportedly worth hundreds of millions of dollars, according to Reuters.

During a Senate hearing this week, President Biden’s nominees to fill two top posts at Commerce sounded promising notes on this front. Alan Estevez, who has been nominated to lead the bureau that administers the entity list, pledged to confront “malign behavior on a number of fronts.”

However, he also repeated a less-than-solid line taken by Raimondo during her own confirmation process. “I see no reason that Huawei would come off the entity list, unless things change,” he said, declining to completely eliminate the possibility. Raimondo’s own comments to that effect almost jeopardized her own confirmation earlier this year.

And maybe that should have prevented her confirmation. Her department’s Huawei stance, as well as the interview she gave the Journal vindicate the lawmakers who raised serious concerns about her nomination in January.

Raimondo also told the Journal that she’s also open to Chinese investment in U.S. green technology:

“I could see that as being an area of fruitful co-investment” with China, she said, adding she would have to examine whether a Chinese state-owned firm was involved and whether that posed national security concerns. In the past few years, a Chinese company built a solar-panel factory in Florida and a Korean firm built one in Georgia.

The Biden administration’s policy toward China started with strong moves on Taiwan and the Chinese Communist Party’s human-rights abuses, but seems primed to accommodate Chinese demands in other areas.