The US’ vendetta for Huawei is a very decisive issue in the tech world — let’s not pretend otherwise. There are some who worry about the Chinese government’s power over Huawei and there are others who wonder why the UK, Germany and others have decided, with the same “evidence” to NOT ban Huawei and think that the US should put up or shut up.

Unfortunately for Huawei though it matters little what the US “allies” (at this stage) think because the US have decided to extend the ban on Huawei. Not only are they extending the ban to May 21 but their commander-in-chief has also decided to expand the ban.

During the week current US president, Donald Trump, re-signed (no, not resigned), the executive order limiting any US companies’ ability to do business with Huawei. The order will now last until this time next year, assuming there isn’t a change in US government in the November elections.

Along with the extension of the ban for another 12 months the US have announced an expansion that will require international manufacturers of semiconductor supplies will need to obtain a licence if they trade with Huawei. It may be an over-reach from the US government to ban international manufacturers, especially given they have effectively forfeited and given up their “job” as the world police in the current administrations introspective world view.

Some manufacturers, including TSMC, are seeking legal counsel over how to proceed given that they are not a US-based company.

It will be interesting to see how this affects Huawei’s ability to produce their own devices, network equipment and chipsets. Last year we thought it was all part of Trump’s trade war with China and it may well still be but with the way he vacillates between hating China and loving them and praising their leadership it is unclear just what is on his mind.

One thing for sure though is that China will most likely retaliate and they do have a lot of ways they could, including blocking the businesses such as Apple, Cisco, Qualcomm and Boeing from operating or buying supplies from China. These companies rely on their Chinese income extensively wiht China making up 14.8% of Apple’s total revenue last year. Not only that but a ban on US chip suppliers could cost them US$36 billion in revenue.

Last year China retaliated very little but this new extensive ban may see an equally extensive retaliation from China. The Chinese government is being encouraged to fight back strongly this time by former officials with He Weiwen, a former senior trade official and an executive council member of the China Society for World Trade Organization Studies saying:

China should implement these countermeasures to the extent that the US dare not ask for a mile after being given an inch. [China should carry out] thorough investigations into relevant US companies and let them feel the pain.

As this sage goes on do not expect Trump to change his mind before the November election given his base’s baying for blood of anyone associated with China. For Trump, in the end it is all about November. It will be interesting to see what China do in the meantime and how Huawei deal with the new restrictions.

Unfortunately, if things stay on the current path, in the end products will either not exist and/or cost more and then we, the consumers, all lose. Not my favourite outcome, that’s for sure.

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Peter
Peter
22 days ago

You guys heard of spell check? lol