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The US-China trade war: Why is Huawei still unable to smile after being "loosed" by the US?

The US-China trade war: Why is Huawei still unable to smile after being "loosed" by the US?

. 3 min read

The US-China trade war is full of unexpected steps from both sides. After the recent embargo, consumers, US supplying companies, and global retail chains all were “taught” an important lesson about Huawei.

At first glance, it seems Huawei can breathe. After meeting with Chinese President Xi Jinping at the G20 Conference, US President Donald Trump decided to allow US companies to sell equipment to Huawei. This means the global expansion road of Huawei will enlarge greatly; the ability to develop and sell the next generation of smartphones no longer cut off as before.

But everything cannot change from gray to pink so fast. In fact, Huawei’s future just reduces gray a bit.

What’s next?

Trade war 1
The US-China trade war is full of unexpected steps from both sides.

The simple reason is from having no one knows what will happen next. Over the last 2 years, the US-China trade war has repeatedly cooled down and then “warmed up.” For example, in May of last year, the Treasurer of the US has made a statement, “We (the US) will pause the trade war.” And, after just a few days, the US announced it would put a 20% tax on high-tech products from China.

Huawei is one of the most affected companies in this trade war. The embargo on cutting US companies relationship with Huawei is the most powerful blow, most obvious for China technology giant. Once Google has “taken a break” from Huawei, Huawei smartphones running Android will become extremely bad. Once ARM has stopped contacting to Huawei, the ability to develop a Kirin chip on a par with Snapdragon or Exynos will also close.

Fortunately for Huawei, this ban was partially removed by Mr. Trump.

I said OK, we would continue to sell (to Huawei) those products – which made by American companies. These are all complex products.

Mr. Trump said in an interview.
Trade war 2
Huawei had harbored hope to set its foot in the US.

But, who is sure what will happen next? There is anyone remembers, at the end of 2017 (i.e., when Mr. Trump has assumed office for one year), Huawei still harbored hopes to set its foot in the US through a partnership with AT&T. Then, right at the CES event – one of America leading technology events, CEO Richard Yu got the information that AT&T had canceled cooperation because of pressure from the US government.

It seems Mr. Trump is giving softening words to China and Huawei. But, last December,  just some days after the US side informed it would postpone the commercial sanctions plan, CFO Meng Wanzhou (daughter of the founder – Ren Zhengfei) was arrested. Currently, Ms. Meng has not been released yet; and Huawei, despite being bought from US companies, is still on the blacklist of this country.

Consumers and US companies

And once again, no one knows what will happen next. No one knows whether the shock of May will repeat or not. Would a normal user accept to take risks that their smartphone may be stopped updating while a Samsung smartphone or even an OPPO will be still “up to date”? Should a retail chain in India or Spain store Huawei to be in a state of permanent anxiety? Should US suppliers put their hope in Huawei, or will they seek to increase business with other companies with less risk from the trade war?

Trade war 3
Who is willing to buy a smartphone that can stop Google support at any time?

The answer to every situation all is very obvious. It does not need to “forbid strictly” Huawei, Mr. Trump showed just need a few weeks embargo could make how hard it is for both Huawei and its stakeholders.

Google, Qualcomm, Intel, and Microsoft,… belongs to the US; ARM or Tokyo Research will have to follow the US to quit playing with any companies that have been in the US blacklist. And, that’s all to enough for consumers, US companies, and global retail chains to learn their own lessons: Be careful when continuing to do business with Huawei.