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US sanctions on Huawei could backfire

The Edge Singapore
The Edge Singapore5/27/2019 8:0 AM GMT+08  • 4 min read
US sanctions on Huawei could backfire
SINGAPORE (May 27): It was only to have been expected. After nearly a year of pressure that failed to stop Huawei Technologies Co’s expansion -- especially in the rollout of the next generation 5G wireless network globally -- in its tracks, US President
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SINGAPORE (May 27): It was only to have been expected. After nearly a year of pressure that failed to stop Huawei Technologies Co’s expansion -- especially in the rollout of the next generation 5G wireless network globally -- in its tracks, US President Donald Trump signed an executive order effectively barring American firms from doing business with the Chinese telecommunications equipment company.

The inclusion of Huawei on the US Department of Commerce’s Bureau of Industry and Security’s (BIS) Entity List means that companies would need to apply for a waiver to supply goods with 25% or more US-originated technology or components. It is also known to some as the “death penalty”, and is a targeted attack on Huawei, observers say.

The intended effect was almost immediate: Google, developer of the Android mobile operating system, said it would stop delivering updates for the tens of millions of Huawei handsets in the worldwide market. Not long after, global tech firms, including British chip designer ARM Holdings, owned by Japan’s Softbank Group, announced they were cutting ties with the Chinese company. Japan’s Panasonic said it would halt some business with Huawei, in compliance with the ban. Meanwhile, even mobile service providers outside of the US are suspending, or reconsidering, launching Huawei’s 5G-enabled phones.

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