Till Trump do they part: Top tech firms cut ties with Huawei following US trade blacklisting
A dispatch from RT.com
The US in its malicious myopia is pushing China to complete autarky.
The US uses the only thing it still has: military and commercial muscle, plus some (shrinking) corners of technology monopoly. In the long run, acting like a gangster is a losing proposition.
[dropcap]L[/dropcap]ast week, US President Donald Trump signed an executive order aimed at banning Chinese telecoms like Huawei from selling equipment to the US over an unacceptable risk to national security.
Following the order, the US Department of Commerce announced the blacklisting of Huawei along with 70 of its affiliates. The step prevented US-based corporations from selling or transferring technology to Huawei without a license issued by the Bureau of Industry and Security (BIS).
READ MORE: Who’s afraid of Huawei? Why Google’s ‘fatal blow’ may actually be a sign of desperation
The harsh step has forced both foreign and US technology giants to halt their business transactions with the Chinese corporation to comply with the president’s order. RT looks at the companies that have opted to break up with Huawei.
The American multinational technology company was the first to suspend its licenses and product-sharing agreements with the blacklisted Chinese corporation. Google, focused on internet-related services and products, cut its business deals with Huawei that involve the transfer of hardware and software. Google’s steps unavoidably deprives Huawei of access to Android operating system updates with its upcoming smartphones to be shut out of some Google apps.
Also on rt.com The art of trade war: Chinese firm bans workers from buying American goods & stateside travelIntel, Qualcomm, Xilinx & Broadcom
The Silicon Valley chip makers froze their supplies to Huawei following the US government’s announcement. The companies reportedly have told their employees that no new shipments would be made “until further notice.”
Lumentum Holdings, which sells components to Huawei, announced plans to halt the deals with the Chinese firm. The company said that it was lowering its quarterly outlook since sales to Huawei totaled 18 percent of overall revenue in the latest quarter.
Panasonic
Japan's Panasonic has joined US firms in stepping away from Huawei in the wake of the ban. The corporation said it would stop supplying some components to the Chinese firm. Later, the company said it was scrutinizing whether its products break US restrictions on trading with Huawei, causing some confusion, as the latest claims contradict the previous ones.
The US technology company removed Huawei’s products from its retail stores as well as Azure Stack, one of its websites offering cloud gear. Miсrosoft may also cut ties with the Chinese corporation in the sphere of consumer electronics and B2B decisions.
Vodafone
The UK telecom group Vodafone announced plans to suspend pre-orders of Huawei 5G handsets due to an alleged security controversy involving the Chinese company. The step came shortly after British mobile network operator and internet service provider EE said it had “paused” the launch of Huawei's 5G phones.
Also on rt.com ‘Shutting down’ Huawei ‘10 times more important’ than trade deal with China – BannonSoftBank, KDDI and NTT
Japanese major mobile carriers SoftBank and KDDI announced plans to postpone sales of new Huawei smartphones. Another telecommunications company, NTT, said it would stop taking orders for the new Huawei handsets, despite previous pledges to launch a new high-end Huawei model in the summer.
Amazon Japan
The Japanese unit of the US e-commerce titan Amazon suspended direct online sales of Huawei products. The company still allows third-party vendors to sell devices, including smartphones, tablets and PCs produced by the Chinese company.
ARM
British chip designer ARM ordered its staff to suspend “all active contracts, support entitlements, and any pending engagements” with the Chinese tech firm.
China will obviously superate this bitter moment, but the blow below the belt is designed to make the firm lose market share, and weaken China's advances in sensitive technology. The Anglo-Americans are showing the world the meaning of unprincipled dealings.
Stupid economics’: Attack on Huawei tells world to avoid doing business with US - Prof. Wolff
The trade war with China has already evolved into a technological one as Washington barred American companies from supplying Huawei with components or technology. The move will eventually deprive the Chinese corporation of access to Google’s apps and services as well as Intel and Qualcomm chips when the measure fully comes into force.
“This is going to hurt the American economy for years to come in countless ways, it will leave an economic scar on the American economy and there is… a stunning example of stupid economics,” professor emeritus of economics at the University of Massachusetts, Richard Wolff, stressed in an interview to RT.
He explained that the way the Trump administration is “hurting” Huawei may apply to many others. Now, CEOs realize that interactions with US firms may become unsafe and put companies in a vulnerable position. Thus doing business with the US can result in damages for companies, who can “be destroyed by a political operation” as the Huawei case shows.
“Here is the terrible, terrible miscalculation of the United States, which is very similar to the miscalculation of this tariff war. You’re teaching the rest of the world not to trust doing business with the United States,” Wolff said.
“Every CEO of every company has this morning sent a memo to the vice president, saying ‘reduce our interactions with United States companies, it is not safe for us.’ We become vulnerable.”
Trump’s decision also hurts US companies as they are forbidden from operating “in the normal way – to find the best quality at the lowest price.” The analyst stressed that no other political leader in Europe or Latin America has done such a “public attack” on their own businesses.
Huawei has long been ready for US ban & won’t bow to pressure, CEO says
Huawei may prove the bone that chokes the dog, some observers note. The firm is a technology flagship and China's pride will not permit it to bend a knee to the mafia in Washington.
US restrictions won’t hurt Chinese telecom giant Huawei much, as it has long been prepared for it, CEO Ren Zhengfei stated, adding that the firm has no intention of changing its activities on the US’ request.
“We have already been preparing for this,” the founder of Shenzhen-based Huawei Technologies said, as cited by Nikkei in his first speech since Washington severely hampered access for the firm to the US market over alleged security risks. Ren Zhengfei’s daughter, Huawei CFO Meng Wanzhou, was arrested by Canadian authorities at the end of last year, resulting in a diplomatic row between China, Canada, and the US amid the already flaring trade tensions.
Also on rt.com ‘All Chinese money into Silicon Valley stops’ after Huawei ban, former Beijing banker warns He added that the tech firm will advance by developing its own chips to lessen the impact of the ban on its production and can stay afloat even if Qualcomm and other American producers refuse to sell chips to Huawei amid escalating tensions.
The statement comes shortly after Huawei’s chipset subsidiary, HiSilicon, said that it has a “backup plan” and is ready to switch to its independently-developed chips to mitigate the US’ measures.
While the ban makes it much more difficult to do business with American companies, Huawei does not expect that it will have a significant effect on its long-term performance.
“It is expected that Huawei’s growth may slow, but only slightly,” the CEO said. Ren added that the company’s annual revenue growth may undershoot 20 percent.
Also on rt.com Huawei may pull out of markets where it is not ‘welcome’ Last year, another Chinese firm, ZTE, suffered similar restrictions from the Trump administration when American firms were banned from selling parts and software to it, eventually leading to a crash in the company’s stock price. The measure was lifted after ZTE agreed to pay a $1.4 billion fine and change its board and executive team.
However, Huawei said it’s not going to follow their fellow telecom’s example and dance to Washington’s tune.
“We will not change our management at the request of the U.S. or accept monitoring, as ZTE has done,” Ren said. “Even if the US asks us to manufacture over there, we will not go.”
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