Huawei case: the point on the China-US arm wrestling and its consequences for the defense

After first issuing a presidential decree to prohibit the purchase by American companies of technologies developed by Huawei, the US Department of Commerce finally grants a 3-month reprieve to the Chinese manufacturer. On the surface, these changes of course may have suggested that the US government was sailing on sight. However, Donald Trump announced on Friday that he was not shutting down the possibility of including the Huawei case in negotiations for a trade agreement with China. Despite the firmness of the measures adopted, the United States is showing its hand: to exploit the Huawei affair to establish a favorable balance of power in the trade war waged against China.

On the basis of the International Emergency Economic Powers Act, the executive order on securing information and communications technologies and services in the Supply chain signed by Donald Trump, prohibits American telecom operators from obtaining supplies from of certain foreign firms considered to pose a risk to national security. It is the responsibility of the Secretary of Commerce to judge whether or not individuals or corporations pose a risk to the United States. It is not specified whether the selection criteria or the motivations to ban or not will be made public. In any case, although not explicitly appearing in the executive decree, Huawei and China are obviously the first to be targeted and impacted by this ban.

« Despite the firmness of the measures adopted, the United States is showing its hand:
exploit the Huawei affair to establish a favorable balance of power
in the trade war waged against China« 

At the same time, Huawei and 68 of its subsidiaries were placed on the “Entity List” of the Bureau of Industry and Security (BIS) of the Ministry of Commerce. This list requires the granting of an authorization license for the “export, re-export or transfer” of specific items to the persons, companies, organizations or countries listed therein. If they do not obtain explicit authorization from the US government, Huawei and its subsidiaries will have to do without American components to manufacture their smartphones.

On a practical level, Huawei is brutally denied access to the Android operating system developed by the American company Google for its future models as well as to strategic components manufactured by Qualcomm, Broadcomm and Xilinx. Thus, it is not only government agencies but also private actors who are disengaging. Taiwanese (Chungwa Telecom), Japanese (Ymobile, KDDI, etc.) and British (EE) operators have announced that they are no longer ordering the latest versions of Huawei phones.

« If they do not get explicit permission from the U.S. government, Huawei and
its subsidiaries will have to do without American components to manufacture their smartphones.« 

Song of the Swan of the United States?

If the situation seems to get worse for Huawei, the Chinese manufacturer seems far from falling from the clouds. Two internal letters made public and acknowledged by Huawei reveal that HiSilicon, its semiconductor subsidiary, has for several years devoted resources to drawing up business continuity plans if the United States were to ever cut power. access to key technologies for the manufacture of their products.

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