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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