In light of the G-20 summit in Osaka, Japan, Huawei Technologies Co. has now responded to Trump’s statement: “Huawei has been informed of US President Trump’s statement about Huawei last weekend. We will wait for instructions from the US Department of Commerce…”
Huawei’s statement indicates it isn’t aware of the true extent of the ban, but what can be known from Trump’s statement is that the relaxation of the ban is only for the profit of American tech companies, so that they can sell products to Huawei. Trump said in a statement that the US will continue selling to Huawei, and that he was urged to relax the ban by high-tech American companies, no doubt suffering from losing Huawei’s business.
In the mobile sector, companies such as Qualcomm, Intel, Micron, Microsoft, and others have been feeling the weight of the ban on their finances. Huawei had already stockpiled three months’ worth of mobile equipment by which to continue its mobile business in case of a political emergency.
Before Trump’s statement to Chinese President Xi Jinping in Osaka, Micron and Intel had begun selling to Huawei anyway under certain legal loopholes overseas, so perhaps they were more excited at Trump’s declaration than anyone else. Huawei invests $11 billion a year in the mobile and semiconductor spaces, money that American companies don’t want to lose.
White House economic advisor Larry Kudlow said yesterday that the relaxation of the Huawei ban is “not a general amnesty” on Huawei as a whole; in fact, Huawei remains on the US Entity List. American companies are allowed to sell to Huawei so long as there’s no national security risk involved in such transactions — meaning that Trump still has his eye on Huawei as a national security risk.
Additionally, the relaxation of the ban won’t see Huawei acquire any new licenses to do business with the US, meaning that it’s likely Google’s revocation of the company’s Android license won’t be reversed through the August 19th deadline, when it takes full effect.
At home here in the US, Florida Senator Marco Rubio has been one of the foremost on the danger behind Trump’s placing Huawei in some sort of US-China Trade deal, saying that the US cannot relax its stance on Huawei. President Trump’s announcement saw Rubio take to social media to proclaim that, since Trump seems content to relax the Huawei Ban, Congress will apparently have to override the President’s claims and see to it that Huawei gets a stern response from the US.
Huawei was placed on the US Entity List last month by the President, with American companies told to stop doing business with the Chinese corporation. Google followed suit by revoking Huawei’s Android license, and Microsoft, Intel, Qualcomm, Micron, and other companies ceased selling components and software to Huawei.
American online retailers such as Walmart and B&H Photo have stopped selling Huawei phones, and even US shipping company FedEx stopped shipping Huawei phones to the US. FedEx later filed a motion in court to place itself outside the ban because it grew tired of being in the middle of the political battle and being forced to cease shipments of Huawei devices.
Huawei says it expects to lose $30 billion over the next two years behind the ban, though it has other strategies up its sleeve, such as filing a lawsuit for its telecommunications gear the US seized 20 months ago but has not yet returned, calling in its patent royalties from Verizon Wireless to the sum of $1 billion, and creating a second sub-brand called “Nova,” marketing more for its Honor sub-brand.
Huawei is considering calling for patent royalties from American clients, a practice the company has not yet called in until now but is understandable in light of the financial loss behind the ban.
Huawei has delayed the launch of its upcoming MateBook laptop and has postponed indefinitely the launch of its Mate X foldable smartphone. While Huawei announced days ago that it wouldn’t launch its foldable smartphone due to Samsung’s problems in the Galaxy Fold, a new report says that the Mate X launch isn’t far off and that Huawei plans to launch the device this year.
Huawei says that it is unfairly placed on the Entity List and is merely a target of a political battle, but there are sufficient reasons beyond Huawei as a political token. A recent report discovered that Huawei’s software has vulnerabilities and backdoors (some that have been pointed out by the UK-based HCSEC that have yet to be fixed) and that Huawei’s employees have ties with the Chinese military, filing research papers bearing the Huawei logo.
Huawei’s own CEO Ren Zhengfei is a former soldier of the Chinese military, though he claims one cannot conclude Huawei is affiliated with the Chinese Government because of his personal affiliation. Chinese Intelligence Law dictates that all citizens must comply with Chinese military orders when directed and that the Chinese military protects all complying citizens.