The United States has had major security concerns about Huawei’s role in implementing 5G and has banned it from assisting in the creation of American 5G networks. Huawei is now threatening retaliation if things do not de-escalate soon.
It is no secret that Huawei is under the eye of President Trump and the United States as representatives of both sides have condemned the Chinese technology giant. Following an extended ban on Huawei’s involvement in telecommunications for U.S. companies until May 2021, the biggest Chinese technology company has stated that it will cause a “terrible price” to be paid by the telecom industry as a whole and the United States.
The latest measures from the U.S.’s Commerce Department will have greater repercussions than meet the eye. Huawei has found itself unable to conduct business with important partners such as Taiwan Superconductor Manufacturing Co., a producer of critically important silicon essential to producing devices and gear. Huawei has stated that this will cause its business operations to be “significantly affected” and as a company held in high esteem by the Chinese government because of its accomplishments throughout the world, the measures taken against them have drawn criticism from Beijing. Two months ago, Guo Ping, Huawei’s Rotating Chairman had warned Washington against imposing such measures though he has yet to comment on the latest regarding possible retaliation from Beijing.
“Our business will significantly be impacted,” said Ping. “Given the changes in the industry over the past year, it dawned on us more clearly that fragmented standards and supply chains benefit no one. If further fragmentation were to take place, the whole industry would pay a terrible price.”
Though the full effect of these restrictions have yet to be measured, many suppliers of Huawei have seen their shares sink in Asian markets including companies like AAC Technologies Holdings Inc. and while Guo has remained a bit quieter, Richard Yu, CEO of Huawei Consumer Business Group has stated that “The so-called cybersecurity reasons are merely an excuse.” Yu has even posted an article on social media with a headline that includes the question: “Why Does America Want to Kill Huawei?”. He believes that the overall goal of these measures lies in America’s interest in protecting its technological interests rather than security threats touted by Trump and others.
Additional concerns were expressed by Huawei’s spokesman Joe Kelly that believed the United States was using its technological positions to dominate companies outside of America to advance its own interests. “This will only serve to undermine the trust international companies place in U.S. technology and supply chains,” Kelly said as he read from a company statement, “Ultimately, this will harm U.S. interests”, he added.
Time will tell if things can be smoothed over between Huawei and the U.S. But as both sides continue to ramp up economical retaliations and with the political complications between America and China, both sides could end up disrupting global telecom markets. As sides are chosen and agreements continue to be drawn up, the battle to develop 5G infrastructure is one to pay attention to as the network looks to grow in its infancy.
Source: Yahoo Finance