Huawei has not had a good week. It situation started exactly a week ago when President Donald Trump used an executive order to declare a national emergency against US technology. At the same time, Huawei and 68 affiliates were included in the list of entities of the Bureau of Industry and Security (BIS) of the Department of Commerce. This prevents Huawei from obtaining components and parts unless the US government issue a license.
After Google broke bridges with Huawei last weekend, Trump gave Huawei a little break on Monday. Huawei has obtained a temporary 90-day license to obtain parts of the United States.
“necessary to provide service and support, including software updates or patches to existing Huawei handsets.”
So, Google promised to upgrade existing Huawei phones until August 19th. But the lifeline launched by Trump for Huawei does not help the manufacturer when it comes to future devices, like the Mate 30 series scheduled for this year. And the British ARM chip development companies could have closed the coffin when it announced yesterday that it would cut bridges with Huawei. Of course, the company develops its own chips but uses software from the US.
To do this, Huawei Kirin’s SoCs use the ARM architecture. It turns out that ARM projects contain “original US technology“.
So, the future of the company that will become the world’s largest smartphone maker next year is in the air. On several occasions last week, we asked ourselves if the real reason for Huawei’s placement in the entity list was to use the company as a lever in the trade war between the United States and China.
And this was confirmed today by President Donald Trump himself. A video published by C-SPAN shows Trump’s comments today to a journalist after announcing a $16 billion aid package for farmers affected by the trade war.
When a reporter asked about Huawei, Donald Trump first said: “Huawei is something that is very dangerous.” He adds that “from a military point of view, it is very dangerous“. He further included that the company could be used included in a trade agreement with China. “Therefore, it is possible that Huawei is included in some sort of commercial agreement if we had an agreement, I could imagine that Huawei would eventually be included in some way, as part of a commercial agreement.” The journalist asks the president how it would be and Trump replied: “It would be very nice for us.” But Trump changes again. “Oh, it’s too early to tell, we’re very worried about Huawei from a security standpoint.”
There is still hope for Huawei if both countries can reach a trade agreement
So, it turns out that Trump has two reasons to punish Huawei. One is the problem of security and the second, as we have hypothesized, is to use the company as a commercial chip in a trade war. Technically this could be good news for Huawei because if both sides agree on a new trade deal, the company could be out of trouble. But, again, who knows what’s in Trump’s mind?
This is the man who announced in July 2017 that Apple CEO Tim Cook had told him that Apple would plan to build “three large plants, beautiful plants” in the United States. Apple had no idea what Trump was talking about.
Another example, perhaps more relevant, occurred last year when ZTE, a threat to US national security. It was paralyzed by an export ban that prevented the company from obtaining parts from the US. A tweet complaining that the Commerce Department’s ban led to “Too many jobs lost in China“. Trump asked that the Department of Commerce establish an agreement with ZTE and this is exactly what happened.
Huawei obviously expects it to be simply a pawn in the trade war and that once an agreement is reached between the two countries, it can return to the path that led it to overcome Samsung at the top of the global smartphone industry next year
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