The Chinese tech giant, Huawei has become a focal point of the US-China trade war, and this was made evident when the Trump administration added the company to its entity list last week.
According to BBC, Huawei has become a controversial company after being suspected of working with the Chinese government in accessing the privacy of users around the world. The restriction placed on Huawei by the US government prevents them from dealing with any US-based company without a license. This has affected the company’s relationship with Google (GOOGL) as they would not be allowed to use the Google Android OS and its services. In regard to this, Google said in a statement that they are “complying with the order and reviewing the implications.”
On Monday, the Trump Administration loosened the ban on Huawei as announced by the US Commerce Department. This slack on the ban would allow the Chinese tech company to buy US goods until August 19 according to Reuters. The US government is confident that this 90 day window would permit US-based companies that are relying on Huawei to source for other alternatives.
The ban last week affected many Huawei suppliers in the United States, including Qualcomm, Intel Corp, and Lumentum Holdings Inc, according to Bloomberg. These suppliers experienced an over 1% surge in stock prices on Tuesday morning after the restrictions were slacked as recorded by Reuters, New York.
What is Huawei doing about this?
The Founder and CEO of the Chinese giant, Ren Zhengfei, addressed the Chinese media, CCTV, on Tuesday, saying that the US temporary permission to deal with US companies made very little sense. Nonetheless, he asserted that the company is prepared for any disruption in its supply chain saying “we shall not narrow-mindedly exclude US chips. We shall grow together. But when there is a supply shortage, we have a backup.”
As reported by BBC on Tuesday, Ren affirmed their strength, saying, “the current practice of US politicians underestimates our strength.”
“We sacrificed [the interests of] individuals and families for the sake of an ideal, to stand at the top of the world. For this ideal, there will be a conflict with the United States sooner or later.” Ren went on, relating the inevitability of the company’s clash with the US and openly confirming that the US interests would be threatened by Huawei in the nearest future; South China Morning Post reported.
The effect on Huawei Users
Although the company is making efforts to develop its components, as Ren told the Japanese media last week, this temporary license allows existing Huawei users to access Google services and enjoy the new updates on their Android devices till August 19. This was confirmed when Google (GOOGL) stated that the move would allow the company to provide “software updates and security patches” to existing Huawei smartphones for the next 90 days; according to BBC.