Huawei responds to Trump's national emergency ban on foreign telecoms

18 May, 2019, 04:00 | Author: Wade Massey
  • Trump has signed an executive order to ban foreign telecoms equipment

The announcement that Huawei would be put on the Commerce Department's entity list took tech companies by surprise and many are now scrambling to figure out what that will mean for their operations.They argue a move to cut off Huawei from American technology sales would further decouple USA firms from the global technology supply chain and end an important revenue stream.

Trump stepped up the USA battle against Huawei on Wednesday when he signed an executive order prohibiting the purchase or use of equipment from companies that pose "an unacceptable risk to the national security of the United States" or the safety of the American people.

United States officials told Reuters the order would also make it hard, if not impossible, for Huawei, the largest telecommunications equipment producer in the world, to sell some products because of its reliance on USA suppliers.

Ltd. and 70 affiliates are being added to the US Commerce Department's "entity list". "China will take all necessary measures to protect Chinese companies' legal rights".

At the same time, Canada suffered a fresh blow when Beijing formally arrested two Canadians who have been detained for months on national security grounds, a move widely seen as retaliation for Ottawa's arrest of a Huawei executive a year ago at Washington's behest.

China's telecom equipment giant Huawei Technologies Co.

The U.S. government will review license applications under a "policy of presumption of denial", according to a posting on the Federal Register, the U.S. government's daily journal.

China responded angrily, as it has to other USA accusations and threats against Huawei - a private company, but much revered as a national champion.

"First, it is not the best way to defend your national security - we don't need it".

A range of Asian and European suppliers would also be hurt if Huawei was forced to curb production, while telecom carriers that rely on Huawei, and have largely resisted USA calls to bar the company, would be left scrambling just as countries race to roll out next-generation 5G mobile networks. He drew a compelling parallel between British companies building telegraph networks all over the world in the late 19th century and Huawei today, arguing that while neither commercial enterprise was set up as an arm of their nation's government, circumstances pushed them into doing the home country spies' bidding for them.

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The spat over Huawei adds to the uncertainty over efforts to revive a deal that would end a bruising US-China trade war after the two sides exchanged fire with tariff hikes in recent days.

He added that he had no information on any plans for a US trade delegation to visit China.

Worldwide technology companies are anxious about the effects of these moves on the technology industry.

It came less than 24 hours after Mr Trump signed an executive order banning.

Why? Because Huawei uses components from a bunch of USA chipmakers, who will now either have to stop serving the tech giant or apply for a licence, details of which are not clear. The company, they say, could use the equipment for espionage on behalf of China.

Analysts cut price targets on several microchip companies, including Xilinx Inc.

The pain for Huawei's supply chain would be redoubled if the trade war were to send shock waves through the larger Chinese technology industry.

"Huawei being unable to manufacture network servers, for example, because they can't get key USA components would mean they also stop buying parts from other countries altogether", said an executive at a Huawei chip supplier.

Lu gave no details, but analysts warned the export controls threaten to worsen a U.S.

"The CEO, who also wanted to remain anonymous, told Kernen, in a jab at Huawei, "'[If] Huawei has no access to USA tech, do they have a 5G product? "However, it is regrettable that the US side unilaterally escalated trade disputes, which resulted in severe negotiating setbacks".

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