Huawei’s future now does not depend on business or economic decisions, but geopolitical ones
DESPARDES News Monitor – President Trump on Wednesday signed an Executive Order to ‘secure the Information and Communications Technology and Services Supply Chain’, declaring that threats to the information and communications technology and services supply chain by foreign adversaries are a national emergency.
Analysts say China and the world’s largest telecom Huawei finds itself in the crossfire of US-China trade war as it sparks a “national emergency” in the US. Huawei’s future now does not depend on business or economic decisions, but geopolitical ones, writes Sky’s Tom Cheshire.
“In the space of a year, it’s gone from a little known company in the US to a “national emergency”, wrote Cheshire.
The move by Trump Administration comes amid breakdown in talks between US and China which led to America’s decision on May 10th to raise tariffs on $200bn-worth of Chinese imports from 10% to 25%, covering products such as car parts and circuit boards.
The U.S. imported a record $539.5 billion in goods from China in 2018. By contrast, the U.S. shipped a much smaller $120.3 billion in goods to China last year, Census trade figures showedMarket Watch
“In one year Tariffs have rebuilt our Steel Industry – it is booming! We placed a 25% Tariff on “dumped” steel from China & other countries, and we now have a big and growing industry. We had to save Steel for our defense and auto industries, both of which are coming back strong!, tweeted Trump today.
According to analysts, the executive order effectively bans Huawei from the US market. Huawei has already been banned from federal networks. And it doesn’t have much of a presence stateside.
Its huge revenues – $107bn in 2018 – overwhelmingly come from China and the rest of the world.
Both sides have raised tariffs, but the lopsided trade relationship between the two countries means the impact will fall heaviest on Chinese producers and American consumers and farmersMarket Watch
Mr Trump is still a fan of “King” Xi as he likes to call him – even more so, perhaps, after he said that Mr Xi wrote him a very nice letter last week.
The US Commerce Department has already added Huawei to its “entity” list. This means that American companies cannot sell technology to Huawei without a special licence.
But no deal has been reached between the two sides and we’re closer to a full-blown trade war than we’ve ever been.
Exports from US to China fell from almost $130 billion in 2017 as buyers shunned American soy and corn. U.S. farm exports to China fell to $5.9 billion in 2018 from $15.9 billion in the prior yearMarket Watch
Trump’s ‘national security’ Executive Order prohibits transactions that involve information and communications technology or services designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary whenever the Secretary of Commerce determines that a transaction would pose a threat to national security, as articulated in the Executive Order.
“President Trump is acting once again to protect U.S. national security,” the press release said. “This Executive Order addresses the threat posed by foreign adversaries to the nation’s information and communications technology and services supply chain,” said Secretary of Commerce Wilbur Ross. “Under President Trump’s leadership, Americans will be able to trust that our data and infrastructure are secure.”