Support 100 years of independent journalism.

  1. Politics
21 May 2019updated 23 Jun 2021 8:53am

How Huawei’s handsets became the latest victim of the US-China trade war

By Oscar Williams

On 21 February 2019, Fox News broadcast an interview in which the US secretary of state, Mike Pompeo, threatened to withhold intelligence from allies if they adopted Huawei’s 5G telecoms equipment. “In some cases there’s a risk we won’t even be able to co-locate American resources, [such as] an American embassy [or] an American military outpost,” he warned.

The intervention came in the wake of months of lobbying by Washington officials concerned by the threat Huawei poses, as a Chinese company, to US national security. But, just hours later, Donald Trump posted a short Twitter thread which appeared to undermine the entire campaign.

“I want the United States to win through competition, not by blocking out currently more advanced technologies,” he wrote. “We must always be the leader in everything we do, especially when it comes to the very exciting world of technology!”

It quickly became apparent that Trump’s tweets represented his opinion in that moment, rather than a softening of the US stance. Yet the executive order he had been preparing to issue, which banned Huawei from participating in the US’s 5G roll-out, remained under wraps as talks between China and the US continued.

Last week, after both countries imposed new tariffs on each other’s goods, Trump finally issued the order, declaring a state of national emergency. While the document does not name Huawei, it bans American telecoms companies from buying products from “foreign adversaries”.

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A weekly dig into the New Statesman’s archive of over 100 years of stellar and influential journalism, sent each Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy

The move dominated headlines, but it was a related decision to place Huawei on a trade blacklist that has hit the company hardest. Although the company’s telecoms business is limited in the US, Huawei is highly dependent on American suppliers to build its products.

If this was ever in doubt, it emerged on Monday (20 May) that in order to comply with the new trade rules, Google is restricting Huawei’s access to its Android operating system. As the company’s devices have already been certified, Google can carry on providing some updates without dealing with Huawei directly.

However, the restrictions may mean that in the future Huawei is only able to offer a limited version of the Android operating system and could be forced to build its own. Parting ways with Google would stifle its efforts to lure away Samsung customers whose data is also held within the Android ecosystem.

Huawei’s relationship with Google is not the only one at stake here. Intel, Qualcomm, Xilinx and Broadcom have warned that they will stop supplying the company with chips for the time being, Bloomberg reported. While the company has supposedly stockpiled enough components for at least three months, its executives will be looking for a swift resolution to the trade war.

It remains to be seen whether the US will follow through on Pompeo’s threat to stop sharing intelligence with countries that host Huawei infrastructure. Given the NSA’s reliance on information from GCHQ, it is difficult to see how the policy would be tenable in relation to Britain. But the US’s latest intervention suggests it is willing to take drastic decisions to secure a trade deal, even if American consumers and businesses lose out in the process. Its allies should take note.