On May 15, 2019 Huawei was banned by US on the executive orders of Donald Trump, the current president of US. Huawei was added to US Department of Commerce’s Bureau of Industry and Security Entity List due to this order. However due to pressure of different companies, countries and consumers on USA, Trump agreed to ease these restriction on Huawei on June 29. On July 1st Trump official said that they “eased Huawei restrictions“.
Why USA “Eased” Huawei Ban
Due to numerous reasons Huawei’s ban was eased, some of which are explained below:
- US companies bypassing the ban: Companies need Huawei equipment because it has been their major supplier and companies deem their equipment trustworthy. Direct import was banned but some companies started importing Huawei equipment from Mexico. Increase in tech imports from Mexico was seen. Trump stated “Mexico has taken advantage of the United States for decades“.
- FedEx sues Commerce Department of US: Blacklist on Huawei “puts an impossible burden” on the delivery company, FedEx stated. Due to the ban FedEx has been forced to “police the millions of shipments” it transports every day, stating further
This puts an impossible burden on a common carrier such as FedEx to know the origin and technological make-up of contents of all the shipments it handles and whether they comply with the EAR (Export Administration Regulations)
Huawei was not mentioned by name but due to “technological make-up of contents” it is obvious that they are referring to Huawei.
- International Support: Some countries like Germany took both sides and continued their usage of Huawei equipment even though the US government informed them that they will decrease the amount of information being shared with them. Russian telecom lets Huawei develop country’s 5G equipment.
- Britain Needs 5G: Britain reportedly allowed Huawei limited access to 5G infrastructure. China also increased their pressure on Britain to allow them to be a part of 5G roll-out.
- Company Profits: On May 1, 2019 Huawei’s smartphone sales increase 50%.
- American Jobs: Huawei warns US about the decrease in American jobs due to the ban.
- Huawei gets back SD Card and WiFi: Huawei membership was restored by SD Association and WiFi alliance while it launches it’s 5G lab being obscure.
- Smartwatche Sales: Huawei’s wearable equipment shipments quadruple in the first quarter of the year.
- Huawei Strong Stance: Huawei reportedly told its employees to cancel all US meetings to increase the pressure on US.
- China Favours: China boosts Huawei by issuing tons of 5G licenses.
- US Companies Take Sides: Sony, Nintendo and Microsoft joined hands with each other and wrote a joint letter to oppose Trump Ban. It was stated in the letter that in 2018, more than 96% of the video game consoles which were imported in the US were manufactured in China and that if they moved 100% of manufacturing to any other country or even US would cause “significant supply chain disruption and would increase costs “even beyond the cost of the proposed tariffs”.
- Google Security Warning: Google also warned the US government of the national security risks from banning Huawei as the new Huawei OS would be more susceptible to hacks because it would not be as secure as the Google’s Android.
Things are looking good for now as both parties are in dire need of each other. US needs Huawei equipment and Huawei needs US customers. This temporary ban might have made US to realize that they can also not live without Huawei and their equipment and the war of 5G might not merit this action. Huawei always knew that such a day would come as this ban highlighted that Huawei was already working on their substitute smartphone OS, let’s hope they do not need to float their own operating system into the eco system.