BEIJING – Trump administration put criminal charges against Huawei to steal technology. It has not contributed to the sales of hi-tech technology giants in the United States, which posed a spur threat to the business. And he has tried to convince other governments to do so.
But Washington had just not taken Huawei's ability to do business anywhere in the world until late Wednesday, when the Commercial Department announced restrictions on the company's access to American technology.
American companies including Qualcomm, Intel and Broadcom sell Huawei microchip and other specialized parts into smartphone and telecommunications devices. Google's Android software brings power to its phones. Of the $ 70 billion spent by Huawei on other components and supplies last year, $ 11 billion went to American companies, Huawei spokesman Joe Kelly said.
If Huawei is isolated from these suppliers, the impact could be devastating for millions of people who use Huawei smartphones – and for the mobile networks, across a wide round of the planet, which runs on a Huawei device.
It would be a “trading equivalent of a nuclear bomb,” said Kevin J. Wolf, a party in the law firm Akin Gump Strauss Hauer & Feld and a commercial assistant secretary under President Barack Obama.
However, the scope and potential impact of the transfer of the Department of Commerce remains quite clear. The department says it is putting Huawei on its “list of entities” of firms that require special permission to purchase American components and technology. How it decides to grant such permissions, and how wide the products cover the policy, will determine how badly Huawei's business is affected.
According to her a notice to be sent to the Federal Register on Thursday, licenses for sale to Huawei and 68 affiliated companies around the world will be reviewed with a “presumption of denial”, which will prove difficult to obtain. The notice is scheduled to be officially published in the Federal Register on Tuesday.
Due to the great tensions between China and the United States on tariffs, it is possible that the move will be short-term Huawei. Negotiations to resolve the trade fight have stalled, and both sides are digging in their heels. The pressure to get common ground before a prospective meeting next month between President Trump and China's top leader, Xi Jinping, in Japan. A Washington campaign against Huawei could be a bargaining chip.
“In all other administrations, the listing of the entity was only a tool of law enforcement and national security,” said Mr Wolf. “What to look at is whether this will be a trade policy tool and will be used as leverage in negotiations.” T
In a statement on Thursday, Huawei said that the Department of Commerce 's move was "no – one' s interest."
“It will cause significant economic damage to the American companies that Huawei does business with,” said the company, and “affecting thousands of American jobs.” T
Ministry of Foreign Affairs and Ministry of Commerce of China criticized Washington's decision at news meetings that were regularly scheduled on Thursday.
“We urge the United States to stop these unfair practices and create favorable conditions for the common cooperation between companies of both nations,” said Gao Feng, spokesman for Chinese Ministry of Commerce.
[Read more about it execution order. t for foreign-made equipment.] t
The tension between the administration of Trump and Huawei increased after American officials detained Meng Wanzhou, the company's chief financial officer and daughter of his founder, in Canada last year. The company and Mr Meng have criminal charges in the United States in relation to theft of alleged industrial secrets and breaches of sanctions against Iran. Ms Meng remains in Canada and the officers then decide whether she will be extradited.
Washington's action this week against Huawei puts the company in such a way that ZTE, which was much smaller in the Chinese competition in telecommunications equipment, got a few years ago.
The ZTE Department of Commerce added to the list of entities in 2016 having determined that it had infringed US sanctions by selling American-made goods to Iran. In the end, the division changed, and ZTE agreed that there was a fine fine. But a year later, the Department of Commerce said that ZTE failed to comply with the terms of the agreement, and that American technology companies had been barred from selling to the company.
ZTE stopped production and it was almost falling until President Trump applied for the punishment and reduced it to the Chinese leadership.
The incident galvanizing Chinese government and business people. He demonstrated what the country's technological success was based on American business know-how, and how important it was for China to innovate on its own initiative if its economy were to succeed.
Huawei also received a sharp insight into Washington's power.
Since then, the company has stocked “in uncertain times,” said Guo Ping, vice-chairman of Huawei, with reporters in March. The company also worked to develop a network of diverse suppliers, said Mr Guo.
“Huawei has made sustained and deep investments in the last 30 years, and I believe that this has made a significant contribution to Huawei's global supply,” he said.
In particular, the company has invested for many years to produce its own microchips, a key area where most Chinese businesses are weak. Sravan Kundojjala, an analyst based in Hyderabad, India, with technology research firm, Analytics, estimates that three-quarters of smartphones with Huawei ships today have developed chips.
Mr Kundojjala admits that it was suspicious when Huawei, HiSilicon, semiconductor unit began to build its own smart smart phone chips.
“At first I thought this wouldn't come out,” he said. “It's a pet project. They might want to play games with their suppliers. ”
Instead, HiSilicon is a great asset for Huawei, with chip technology that analysts say market competitors as Qualcomm are as competitors.
But Huawei still relies on American suppliers for many critical components that would create an all-exclusive export ban from Washington a relatively large headache, even if it did not adversely affect it as it did for ZTE.
“When you're as complicated as a router or mobile phone, even if there is no part you can't find, you can't deliver it, because you don't have that widget to make the phone or router function, ”Mr Wolf said, the lawyer.