Huawei will be allowed to buy from US suppliers ‘where there’s no great national security problem’, US president Donald Trump has announced.
After more than a month of uncertainty, US president Donald Trump has confirmed that Huawei will be allowed to buy from US suppliers again. The announcement comes after Trump and Chinese president Xi Jinping reached an agreement during talks mounted at the G20 summit in Osaka, Japan.
In May, the US Department of Commerce elected to add Huawei to an “entity list”, which essentially barred US companies from doing business with the Chinese telecoms giant without approval from the US government.
Huawei haemorrhaged key commercial partnerships as firms such as Google, Xilinx, Intel, Qualcomm and more were forced to sever ties. Though the ban was brought in ostensibly to limit Huawei’s 5G reach, in practice it had the largest effect on the company’s consumer business as founder Ren Zhengfei recently revealed that it had endured a 40pc drop in smartphone exports. Thus, the ban illuminated the extent to which Huawei is reliant on the US to provide essential hardware and software to bring its products to market.
To counter potential mass disruption for Huawei customers, the US government granted the company a 90-day reprieve on the ban.
In a conference post-talks with China on Saturday (29 June), however, Trump seemed to almost completely reverse the ban by saying that US companies could sell equipment to Huawei “where there’s no great national security risk”.
Trump has also said the US would not be going ahead with proposed tariffs on $300bn worth of Chinese imports and would continue to negotiate with Beijing “for the time being”.
Though there is yet to be confirmation of whether this is an actual reversal of the trade embargo, Huawei was quick to celebrate the development and hail it as a “U-turn” on Trump’s part.
— Huawei Facts (@HuaweiFacts) June 29, 2019
Trump granted Chinese telecoms provider ZTE a reprieve from an entity ban in May 2018, something he recently explained was a “personal favour” to Xi Jinping.
The US has expressed repeated concerns about Huawei’s dominance in the 5G sphere. The company is currently the world’s largest telecoms manufacturer and a world leader in the provision of 5G infrastructure.
The breakneck speeds promised by 5G have led nations to view the race to roll the technology out as something akin to the Space Race of the 20th century. Whichever nation is quickest to adopt it could gain an essential leg up in the race for technological global dominance.
Though this presents itself as an obvious motivation to stall China’s progress, the US has cited security concerns as core to many of its recent decisions.
The US has objected to China being so central to global 5G infrastructure and has expressed concerns about the potential for government espionage. Huawei has previously been accused of nesting backdoors into devices it provided to Vodafone in Italy, allowing it access to fixed-line networks in the country and, by extension, millions of homes and businesses.
When details from the UK’s national security council were leaked and it was revealed that it was planning on partnering with Huawei on the UK’s 5G roll-out, US secretary of state Mike Pompeo visited outgoing prime minister Theresa May to ramp up pressure to reverse the decision, dangling the prospect of severing the vital intelligence partnership shared by the UK and the US.
This latest move could mean that much of those major tensions have been laid to rest. However, commentators have been quick to note that the trust relationship between China and the US has been indelibly marked.
In contrast, just yesterday (30 June) the Irish ambassador to China, Eoin O’Leary, commemorated 40 years of diplomatic relations with China, noting that Ireland is one of the few countries to enjoy a trade surplus with China and that co-operation between the two nations was “at an all-time high”.