One of the flashpoints in the
ongoing trade dispute between the US and China has been Huawei. The smartphone
manufacturing giant has been a major brand across the globe in recent years,
but has also been hobbled by accusations that its devices offer a tool for
spying by the Chinese Communist Party, especially as the company was founded by
a former PLA officer. This was President Donald Trump’s primary reason to order
the blacklisting of Huawei for government and commercial use, not just for the
US but also its allies. With the recent easing of restriction on the company
however, there is a chance that Huawei can restart stateside sales.
According to Reuters, within this month Huawei could potentially restart its supply
lines with American companies for its smartphone manufacturing. The smartphone
maker, believed to be the current world’s largest telecom device company, has been hurting from the restrictions mandated
by the US government, preventing it from buying American tech components and
partnering with services such as Google Android without a license. A reversal
in this policy was rooted in a late June meeting between President Trump and
his Chinese counterpart Xi Jinping, allowing limited sales of tech to Huawei.
This turnaround was enforced by
the US Department of Commerce, with Secretary Wilbur Ross announcing that
licenses can be issued for American companies to do business with Huawei as
long as no national security threat alert is in effect. Two US microchip
companies under condition of anonymity have confirmed that they are applying
for more licenses to supply Huawei with internal hardware for their devices.
This is understandable considering that many American firms like Qualcomm and
Intel account for about $11 billion of the total $70 billion cost to Huawei in
buying components that go into their smartphones, last 2018.
While this has allowed Huawei to
continue doing business with US interests, the limited scale of transactions has
still significantly limited what the Chinese manufacturer can do stateside. It
has already begun to lay off employees for its American offices as a result. A
Huawei spokesperson maintains that their company has not been found guilty of
actual wrongdoing with regards to cyber-security, outside of President Donald
Trump’s allegations. He has thus asked that Huawei be removed entirely from the
blacklisted entity list, due to the licensing agreement being less efficient.
And it has not stopped the US from negotiating with its other trading partner
nations to exclude Huawei from their upcoming 5G telecom infrastructure
development.
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