Huawei blacklist impacts far more than just 5G deployment

22 May 2019

President Trump recently signed an executive order declaring a national emergency against threats to American technology, adding Huawei Technologies and its affiliates to the Bureau of Industry and Security (BIS) Entity List.

The move will make it difficult for the Chinese networking equipment and smartphone giant to conduct business with U.S. companies. While on the surface, the move was done to protect the emerging 5G network in the U.S. — the next generation wireless connectivity technology that will eventually provide speed boosts of 10 times over 4G LTE — it will also make it extremely difficult for U.S. tech firms to do business with Huawei as well.

As a result of President Trump’s executive order, Google has already suspended business with Huawei that requires the transfer of hardware, software or services, according to Reuters. Current Huawei smartphones with Google apps can continue to use and download app updates provided by Google, but new Huawei smartphones won’t have access to apps such as Google Play Store, Gmail, Maps and YouTube.

Given that Huawei just took over the number two spot in the global smartphone market, the move by Google could hinder any future growth in the smartphone market as future phones will only be able to use the public version of Android without access to proprietary apps and services from Google.

The fallout from the executive order blacklisting Huawei extends to semiconductor vendors as well as Intel, Qualcomm, Xilinx and Broadcom, saying that they will not supply Huawei until further notice, Bloomberg reported. Other companies may follow as well, but if U.S. companies wish to continue to do business with Huawei, they will be mandated to apply for licenses to provide components to the Chinese vendor. These licenses will more than likely be subjected to high scrutiny and will need justification for the transfer of technology components to China.

The Trump Administration believes that using devices or equipment from Huawei may be a threat to national security because of the ties the company has to the Chinese government, stoking fears that the equipment may be used to spy on national interests or consumers if used. The blacklist on Huawei is also part of the Trump Administration’s escalating trade war with China.

Earlier this year, the U.S. warned other countries against using Huawei 5G equipment for deployment of next-generation communications networks with Australia and New Zealand following suit, saying they would not use Huawei equipment. However, during the auctions for the mobile broadband spectrum, Germany said it would not automatically rule out the company for its 5G equipment.

Later, the U.K. said it would also entertain using Huawei equipment depending on the circumstances. France plans to roll out 5G services in 2020 and had previously relied on Huawei equipment for its communications services. The country has not given guidance as to what its plans will be moving forward, only confirming that services will be available by the original 2020 time frame.

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