Trump has been turning up the heat on China for months to achieve a trade deal. One of his tactics has to been to pressure China by pressuring smartphone giant Huawei Technologies Company.
Huawei is one of the largest telecom equipment manufacturers in the world. Its revenues in 2018 amounted to $110 billion, its 1,500 networks serve one third of the planet’s entire population, and it shipped 200 million smartphones in 2018. It is the largest manufacturer of telecommunications equipment in the world and is the second largest manufacturer of smartphones in the world, exceeded only by Samsung.
It is arguably China’s most important multinational company. Which is why the speed of their downfall at Trump’s hands has been so stunning:
Global tech firms, including chip suppliers, are cutting ties with China’s Huawei Technologies Co Ltd after the U.S. government put the world’s largest telecom equipment maker on a trade blacklist citing national security concerns.
The United States has effectively banned its companies from doing business with Huawei, exacerbating an ongoing Sino-U.S. trade war. The ban applies to goods that have 25% or more of U.S.-originated technology or materials, and may therefore affect non-American firms.
I’ve been making a list of bad news articles relating to Huawei that have hit the wires in the past three days. There’s no need to click and read all of them (unless you are interested), but it should give you a good idea of how just how bad Huawei’s situation is:
How is Huawei meant to survive this kind of devastating supplier cutoff? They may have to build their own supply chain, something which will be tremendously expensive and difficult to do. Their business has been crippled almost overnight.