Have you seen the latest memes on Huawei’s controversy? Yes? But haven’t figured out what exactly it is about? Don’t worry. In this article, we are going to take you through the complete details of the Huawei ban and 5G war going on between China and the USA. So, let’s take a look.
1. What is Huawei ban all about?
US authorities have included Huawei in the blacklist. According to the authorities, the companies that are the part of this list cannot be traded with without a special license. Additionally, President Donald Trump has signed an executive order in which US firms have been ordered to cut ties with Chinese technology firms because of the possible threat to national security.
Moreover, Huawei is already under suspicion in the US and European markets to have close ties with the Chinese intelligence agency. This is why a question mark is being raised on the efficiency & the collection of data by the company in lieu of the products and services that it provides. The issue of national security raised in the executive order of Trump administration is because of this allegation on the company.
Both these issues cannot be seen in the individual standing rather; they must be viewed in terms of the trade war that is going in between China and the US for almost a year now. The US is using China’s technology company Huawei as a way to escalate tensions on the economic front and initiating a cold war between the two countries.
2. What could be the reason for such an aggressive policy of Huawei ban?
Up till now, Huawei has not been proved to be the ally of intelligence agencies in any way, then why is the US putting pressure on China by banning it?
Next year is the year of Presidential elections in the US, so President Trump is making a partial political move by engaging China on the economic front. A large population of the US believes that China has been getting an extra edge in trading from last 20 years. Because of which dumping and low price products have become so prominent that the local businesses cannot survive in the industry. This is why the US has faced a major setback in terms of growth and economic development.
With such a point of view, it is easier for President Trump to escalate tensions with China on the economic front and please the public and think tanks, which focus on lesser imports and development of the home industry. Thus, leading to winning a second term in the president office.
However, there can be a severe negative impact of such a move on the diplomatic and economic front. But we guess Mr. Trump isn’t realizing it up till now. A trade war with China can actually lead to the economic slowdown of the US market and can create retaliation in the people. Additionally, the 5G war is the other element of all this pressure mounting up.
3. Timeline of events leading to Huawei ban:
If you are thinking that this decision of banning Huawei and the initiation 5G war is just because of Trump’s order, then you are wrong. Such decisions cannot actually be taken without investigations and inquiries for making a claim. Although, we aren’t claiming that the results of the inquiries have proved Huawei’s involvement with intelligence agencies that is for sure that US intelligence agencies had their say in getting this executive order signed. Here is a series of events that took place in the entire scenario.
Yes, the controversy started in early 2018 when the intelligence agencies of the US requested Senate to put a ban on the products and services of Huawei. Smartphones and all other equipment were proposed for the possible ban because of the allegations of connections of Huawei with Chinese intelligence agencies.
Nearly after 6 months of the initial request made by the company, the intelligence chiefs of some of the prominent countries of the world met to discuss the issue of Huawei ban. US, Canada, UK, Australia, and New Zealand were the countries that took part in the discussion. The major agenda of this meeting was if these countries should allow Huawei to continue operations in their countries.
The results of the meeting were implemented in the next month when the US Congress banned the purchase of technology products from Huawei or ZTE. This ban was limited to the government institutions initially.
The US was not the only country that banned purchases. After a week’s time, Australia put a similar ban on its institutions as well.
In November, New Zealand’s intelligence agency also took action against Huawei. The intelligence agency restricted the involvement of Huawei in 5G development.
Early December 2018:
The European countries were not alone. After all this hassle, Japan also restricted the involvement of Huawei and ZTE in 5G development.
By this time, France Telecom and Czech authorities also intimated their citizens that using Huawei products is not the safe option and they must look for the other options available.
These were the contextual events that led to the current situation. Below we are providing you with day by day account of the developments in the 5G war.
May 15, 2019:
The executive order that initiated this entire 5G war controversy was issued by President Donald Trump. Just a day before it, there were enough rumors indicating this step of Mr. Trump.
May 19, 2019
Google took off the Huawei’s Android license in May 2019. It led Huawei to use open source licensing software. Additionally, Intel and Qualcomm also joined Google in the Huawei ban. As Huawei had been buying chips from these companies, so it was expected that Huawei would suffer a great loss. But the company had been piling up the chips for quite some time to last at least 3 months.
May 20, 2019:
It was the day when Huawei gave the first response to all the ban-related news that the market has been hearing about its devices. In the stamen issued by the company, it was promised that Huawei and Honor devices would continue to get the security update from the company. This was possible because of a temporary license that was issued by the Commerce Department.
The Chinese market of Huawei did not feel the impact of the bans and other such news that was circulating about the company and its headset rather the Chinese consumers are supporting their local company and are continuing its use. One of the other reasons for supporting Huawei, apart from it being the Chinese company, is that the Chinese consumers don’t rely on Google and its services fully. They have the alternative for every application that Google provides.
May 21, 2019:
Microsoft has also come into play by removing Huawei products from its store. Now, you won’t find the Huawei laptops in Microsoft stores. Thus, this is clearly showing that all the US companies are backing the decision of President Donald Trump and taking steps for the implementation.
May 22, 2019:
On May 22, the UK and Japan paused the launch of new products by Huawei in their country until the charges levied on Huawei were negated. So, it can be seen that the prominent countries of the world are siding the US and not China. This could have great political and economic significance. However, up till now the entire issue has remained limited to the US and China only.
May 24, 2019:
Micro SD cards have also banned their usage in Huawei devices. According to the reports, the SD Association has also taken this decision in light of the executive order that Mr Trump has issued lately.
May 28, 2019:
After all this controversy, Huawei announced its own operating system to be in the market by the end of this year. For the international market, the proposition is of launching it by 2020.
May 29, 2019:
Huawei has filed a case against the decision of Donald Trump, pleading the court to mark the executive order as unconstitutional.
May 31, 2019:
Huawei is retaliating back now by ordering its employees to cancel meetings with US officials.
4. What changes are expected for the consumers because of the Huawei ban?
If you are a consumer, then you might be noticing that your Huawei devices would not be updating from some time. This is one of the first impacts that you are facing as the consumer of the Huawei device. Secondly, Google has also banned access to some of the applications for Huawei.
5. How is Huawei ban going to impact the market?
Here are different perspectives through which market can face an impact. We are discussing them in separate section for your ease.
A. Consumer aspect of Huawei ban:
The Huawei ban in the US market is going to impact the market drastically. According to some of the estimates, around 3 billion customers are going to suffer from this controversy. As a result of the restrictions imposed on the world’s second-largest smartphone making company, there is going to be a decrease in competition in the world’s cell phone industry. And the consumers would have to pay high prices, not only because of low competition but because of the high demand for new cell phones too. Not to forget, 5G war is also included in the entire scenario.
B. Market development aspect of Huawei ban:
Currently, Huawei is having a number of patents in 5G technology. Barring it to operate in the industry would not only limit the development of 5G technology but would also make the implementation of the existing research costly, thus leading to delays and other administrative and infrastructural issues.
C. Is it going to affect US firms as well?
Yes, a large impact is going be faced by US firms as well. 1200 US firms are going to have a direct impact because of these restrictions. One of the prominent names in this regard is Google, which has already become hesitant to extend its services to Huawei handsets.
D. How is it going to impact Huawei?
Huawei is going to lose a significant market because of this ban. Moreover, it is facing potential ban threats from other countries as well, leading to greater damage to the company. Furthermore, the US-based suppliers aren’t co-operating with the company either, leading to even more problems for the company.
Keeping all this situation under consideration, the aim of the company to win the 5G war seems very difficult to materialize.
6. Huawei’s Stance:
On all this situation, Huawei has given a statement that if the US is going to impose further restrictions on the company, then there is a likelihood that Huawei would use their own chips in the mobile phone, thus reducing the import from US firms. A big news especially in the context of 5G war. Being on the second number when it comes to producing mobile phones, such a statement must be taken seriously by the US authorities. Or otherwise, a large economic impact could be seen by the small and medium businesses of the country along with exertion of high political pressure on the government.
7. Global Impact of the ban:
Globally, the customers are getting skeptical about purchasing Huawei products, especially after a number of countries are considering about its authenticity as a business organization. No doubt, Huawei is facing a major setback. But then again, the majority of the share of the company is from China, not the US or other individual markets. Thus, there are higher chances that the company would be able to manage this crisis and still pave its way in 5G war waging in this century.
Are you a user of a Huawei device? What’s your stance on this ban? Do you think it is right? Or it is just a political stunt by the current president of the US? Share your opinion in the comments section below.