United States moves against Huawei take effect

United States moves against Huawei take effect

Asian markets mostly fell Thursday as Donald Trump's ban preventing U.S. companies from using foreign telecoms equipment jolted investors who saw it as targeting Chinese providers and risking another flare-up in an already tense trade war. Founded in 1987, the company said on its website that its products reach over a third of the world's population in 170 countries.

Huawei has been increasing its 5G commercial contracts worldwide, with more countries giving the company a vote of confidence.

"This is a direct message to Europe about how it should be thinking of the future of its 5G networks", says Paul Triolo, geotechnology head at political consultancy Eurasia Group. While the order does not name any country or firm, China and Huawei are the obvious targets.

The new networks are critical to reaching data transmission speeds needed to support future "internet of things" applications, such as driverless cars. The timing of the listing, however, suggests it is more likely a tactical move in the ongoing U.S.

Huawei's smartphones are virtually nonexistent in the US, and last week the FCC rejected a Chinese phone company's bid to provide domestic USA service.

The Trump administration has pressured its allies to preemptively ban Huaweiequipment from their5G networks, with limited success. It then announced a more potent and immediate sanction that subjects the Chinese company to strict export controls. But Germany and France have not followed suit.

Switching to these companies could have damaging effects on Huawei's own chipmaking business unit, HiSilicon.

5G will enable revolutionary new technologies like artificial intelligence, driverless cars and automated gadgets and factories, and Huawei has the world's most advanced and cheapest 5G capacities in the world. The executive order applies to future transactions only.

One day after the U.S. moved to block Huawei from the United States market and banned the export of USA technology and materials to the company, China warned Washington Thursday against further harming trade ties. Huawei also makes Windows laptops, with Microsoft providing the operating system.

What did the U.S. sanctions order say?

For the big European operators, however, the main concern in recent months has been that governments will impose restrictions on Huawei's role in local 5G markets.

On Friday (May 17) in the United States, a ban on USA firms dealing with Chinese telecom and smart phone manufacturing giant, Huawei, along with 70 related business entities, will go into effect. Even though in the immediate term if the two sides could reach a deal the fact that the United States and China are facing technology competition in fields such as 5G and artificial intelligence, the fact won't be altered. He was referring to the thousands of antenna stationsthat will process 5G bandwidth.

The Chinese manufacturing giant has sent an e-mail to its employees on the United States inclusion of Huawei in the "list of entities".

However, there are reports that India may limit Huawei's involvement in developing its 5G infrastructure. Inventories and other contract costs rose about a third a year ago, to roughly $14.5 billion.

"While the intent is to punish Huawei, ultimately US companies are also being penalized", Jacobson said. According to a report released by Gartner earlier this year, Huawei "s semiconductor procurement expenditure reached $ 21.131 billion in 2018, a 45% year-on-year increase". Huawei works with the smartphone production with components from U.S. suppliers such as the chip manufacturers Qualcomm and Intel.

Apparently this spending spree includes 35 higher education institutions around the United Kingdom, which will probably come as a surprise to Oxford University, which stopped accepting the Chinese company's cash in January.

"Fortunately for Huawei, both manufacturing and the telecommunication equipment market were surging", Jeffrey Towson, an equity investor and expert on China's digital scene, writes in The One Hour China Book, an analysis of successful Chinese businesses.

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