(Newswire.net — July 2, 2019) — With another G20 summit in the books, the discussion has turned to a wide range of international talking points.
Perhaps unsurprisingly, President Trump has been at the heart of many of these conversations. It’s his relaxing of the stance of trading with Huawei; however, that is raising the most eyebrows.
If you’re unfamiliar with the saga of this beleaguered Chinese smartphone manufacturer, let’s catch you up.
Huawei is the second-largest phone maker in the world. Samsung is still sitting pretty on the top spot, but Huawei still displaced Apple. Despite this, you’ll struggle to find a Huawei smartphone anywhere in the States – and many other western nations.
Huawei has long been dogged by claims of political influence and espionage. Claims have abounded that the company’s technology would – and could – be used to spy on the secrets of China’s political opponents.
Networking apparatus constructed by Huawei has been banned in the USA since 2012, and the Trump administration stepped up this antagonism. The Department of Commerce added Huawei to their List of Parties of Concern in May of 2019, which essentially banned Huawei products from the country. Any chance of a resolution seemed slim.
Naturally, however, six weeks is a long time in politics. Following protests from Huawei, including a request to the US court to declare the Presidential ban as unconstitutional, it appears that the frosty relationship between China and the USA is starting to thaw.
Huawei technology has become a key bargaining chip in the trade deal between the two nations.
The President has agreed to soften the nation’s stance on Huawei, and permit the sale of components for general use.
That’s an important caveat, as Huawei will still be banned from use in government and military technology. It’s a small step for the manufacturers to savor, however, as the future was looking increasingly problematic.
While they remain on the US blacklist, this is the first step toward potential future collaboration.
President Trump has drawn criticism for his decision from some quarters, who suggest that it shows weakness and a lack of concern for national security. Others will be less concerned, as this is hardly the first time the administration has reversed the policy in such a fashion.
A similar dispute occurred with ZTE, another major Chinese tech company last year. Business with ZTE was banned before that decision was reversed.
Just how much impact this decision will have, however, remains to be seen. At the time of writing, Huawei is banned from using Google’s Android operating system.
If this is lifted, it could provide a substantial financial boost for the tech giants. The real money, however, is in 5G – and if Huawei can displace the USA as the market leader of modern wireless technology, China’s already strong economy will continue to swell.
The Defense Innovation Board wrote a lengthy report on the potential impact of 5G, and it doesn’t necessarily make for pretty reading for the States.
Controlling the 5G markets will create substantial revenue streams, and Huawei is in pole position to do this.
This Chinese manufacturer presently transmits the highest speed wireless signals in the world, and no American company is even close to providing competition.
This leaves the future of Huawei a little up in the air at the time of writing. In President Trump’s own words, the relaxation of the ban only applies to the sale of “equipment where there’s no great national security problem.”
The 5G network of an entire country could make a very potent Trojan horse.
These concerns are why the Australian authorities have already banned Huawei from playing any role in building the countries 5G infrastructure, while the UK and Canada ware watching the situation closely.
On the flipside, however, Huawei remains a vast customer for countless American tech giants. This means that, without the ability to sell to this manufacturer, the domestic economy was sure to suffer.
These concerns were reflected in a plea to the President from the Semiconductor Industry Association.
Without the aid of a crystal ball, nobody can say with any certainty what this means for Huawei. The company is symbolic of the trade relationship between the US and China, which rarely runs smoothly, and there are likely to be further twists and turns.
For now, however, it’s a boost for Huawei and something they’ll accept as a win. Sales of Huawei hardware almost halved in the aftermath of President Trump’s ban in May, and the manufacturers will be relieved at the opportunity of increasing their stature once again.
Watch this space for further updates, and be prepared for another about-face.