Trump Order Restrictions on US Firms Dealing With Huawei
The trade war between the US and China rages on. And the latest development has seen President Trump ordering restrictions on US firms dealing with Chinese tech giant Huawei.
On Friday, Trump added Huawei to the “Entity List.” This is a list of 44 Chinese firms restricted from doing business with US companies without US government approval.
Under the restrictions stipulated by the “Entity List”, Huawei will be unable to purchases parts of technology from US companies without government permission. This comes as the US now considers Huawei to be a vehicle for Chinese state espionage.
Google Announces Suspension of Operations with Huawei
Following Trump adding Huawei to the Entity List, the Chinese tech giant has been dealt a massive blow. Google has announced this week that it is suspending the delivery of key software and technical services to Huawei in accordance with the new restrictions.
Big Blow to Huawei’s Business
This will cause massive disruption to Huawei’s business as it relies heavily on Google’s Android operating system for its mobile devices. Huawei shipped more than 200m phones last year, which saw it overtaking Apple in the second quarter. It is now the world’s largest smartphone maker.
Huawei Defends Itself
In response to the announcement from Google, Huawei defended itself. The company claimed that it had worked closely with the Android platform to develop a beneficial ecosystem for users and the industry as a whole.
In a statement, the Chinese firm said:
“Huawei will continue to provide security updates and after-sales services to all existing Huawei and honour smartphone and tablet products covering those have been sold or still in stock globally”.
Will Other Countries Follow US?
The key driver behind the explosion in growth for Huawei is the speed and cost of its 5G products which are far cheaper than any other providers. Following news of the US restrictions, there is now speculation that Europe could follow suit. Concerns regarding espionage have been mainly confined to the US for now. However, we have also seen Australia banning Huawei’s 5G equipment.
Huawei Currently Biggest Global 5G Provider
Huawei currently has 283 global partners as well as 57 regional partners. The firm forecasts that it will have one million base stations globally by 2020.
Furthermore, industry reporting shows that Huawei made the highest number of 5G contributions last year. The company now holds 11,423 patents, followed by Ericsson with 10,351 and Nokia with 6,878.
Other US Firms Announce Suspension in Activity
Google is not the only one announcing the suspension of certain operations with Huawei. Other US firms such as Intel, Qualcomm, Xilinx, and Broadcom have announced that they will not supply chips to Huawei until further notice.
US Warships Sail Through Disputed South China Seas
While US/China trade tensions continue to heat up, US warships have sailed through disputed waters in the South China seas. The commander of the USS Preble said:
“Preble sailed within 12 nautical miles of Scarborough Reef in order to challenge excessive maritime claims and preserve access to the waterways as governed by international law,”
This is the second time that the US has led ships through disputed Chinese waters in the last month. It is a further countermeasure by the US against Chinese attempts to limit freedom of movement in strategic waters.
The US has frequently accused China of over-militarization of the South China seas following the building of military outposts on artificial islands and reefs. However, China defends such moves as necessary for self-defense. In fact, the Asian giant accuses the US of increasing tensions in the region by sending warships and planes through the region.