Huawei’s business appears to be getting a slight reprieve from a US trade ban which has pressured the firm over the past year.
Huawei was added to the US Chamber of Commerce’s so-called Entity List earlier this year; meaning American companies are banned from doing business with Huawei without explicit permission. The decision was reinforced in July when the FCC officially designated Huawei a national security threat.
Although Huawei has increased the production of its own components for a while now, it still relies on some parts from US companies.
There appears to have been some softening of the US’ stance in recent weeks. Unconfirmed reports suggest key American companies have been granted licenses to export to Huawei.
While this is sure to cause a sigh of relief at Huawei, it’ll only be a small one. The reports suggest the US firms have only been granted licenses for exporting 4G-related components and strict restrictions are intact for 5G.
The inability to source components from Qualcomm has been particularly devastating for Huawei. Further restrictions from the US have pretty much prevented Huawei from building its own Kirin silicon.
Kirin processors were built using a lot of American technologies. Security experts say the risk to Western networks has increased now Huawei is having to source more components from outside the US—which led the UK to reverse its initial decision to permit Huawei’s 5G equipment in national infrastructure.
The US maintains that Huawei is controlled by Beijing and poses a national security threat. Huawei strongly refutes the allegations of state control and has offered to have its equipment inspected in most countries where it operates.
While similar concerns were raised about Huawei’s involvement in previous generation networks, the expected use of 5G for more critical infrastructure has increased the scrutiny of all players involved. The US is especially keen to see its Five Eyes allies – the UK, Canada, Australia, and New Zealand – ban Huawei’s equipment to maintain the integrity of the key intelligence relationship.
Political factors have also played a part in many Western countries’ decisions to ban Huawei’s equipment; including over matters such as Hong Kong’s security laws, the communist party’s detention of Uighur Muslims in barbaric “reeducation” camps, alleged state-sponsored cyberattacks, and Beijing’s handling of the coronavirus outbreak.
Sweden became one of the latest countries to ban Huawei’s equipment last month. The country’s telecoms regulator said in a statement that the “influence of China’s one-party state over the country’s private sector brings with it strong incentives for privately-owned companies to act in accordance with state goals and the communist party’s national strategies.”
A month prior, Sweden’s state-owned space company also announced that it would not renew contracts with China or accept new Chinese business due to “changes in geopolitics.”
While it seems many countries are coming to their own conclusions over whether Chinese vendors such as Huawei pose a national security threat, there’s little dispute over the influence that the US has. Huawei is sure to be hoping that the incoming Biden administration will take a friendlier approach to its business.
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