Under pressure from the US government, Google suspended its product-sharing agreements and licenses with Chinese communications giant Huawei. But how badly will the move affect Huawei and what could it do to retaliate?
The Trump administration last week banned US companies from selling to Huawei without a government license, significantly upping the ante in the ongoing trade war between Washington and Beijing. US officials have been warning for months that Huawei could be used by the Chinese government for spying — although some critics, including Megaupload founder Kim Dotcom, accused the US of hypocrisy, slamming its own long history of “abusing technology” and “turning its entire tech sector into a spy machine.”
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A Google spokesperson confirmed on Monday that the company is “complying with the order and reviewing the implications.” So far, it appears that Huawei devices which have already been bought will continue to get security and app updates, but new designs of Huawei phones will lose access to some Google apps and when the newest version of Android comes out, it may not be available on Huawei devices.
Google now, who next?
The ban has sparked speculation that Huawei’s other partners will also cut their ties to the company and cripple its bid to become the top smartphone brand in the world. So far, several major US tech companies have already joined Google to implement Trump’s Huawei ban.
However, it is still too early to tell if companies across Europe, Asia, and the Middle East would be willing to follow the same path of “cutting off a substantial revenue stream or foregoing the choice of a low-cost provider,” Howard Yu, a Professor of Management and Innovation at IMD Business School in Switzerland told RT.
The US’s concerns over Huawei may still represent “a very different reality from the perspective of other nations,” he said.
The US has presented exactly
evidence of Huawei devices being a greater security risk than any other Android phones. This is arbitrary, punitive, and hypocritical.https://t.co/KgxPA0auK7
— Vlad Savov (@vladsavov) May 20, 2019
Washington will likely continue to pressure other nations to impose similar bans on Huawei, but that will be more difficult to do today than in the past, Yu said, given “many countries already harbor a certain distrust” toward the US “because of the many trade barriers Washington has simultaneously erected or threatened to put up.”
Yu also said Trump might be using the Huawei ban as a “bargaining chip” in an effort to force China to open its markets further. But a Western government handpicking one particular company and effectively trying to shut it down on the basis of vague “national security” threats “rather than open evidence” is unusual and unfortunate, he added.
It shouldn’t be a problem for Huawei to find other Chinese and non-American suppliers, independent political analyst Alessandro Bruno told RT, pointing out that the North American market is already saturated and most new growth is in China and other parts of Asia anyway. People in those regions may even choose to buy Huawei phones now “as a political statement.”
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Trade war escalation?
The latest Trump administration moves mean there is now “a real danger of a full-blown and highly destabilizing trade war breaking out” between the two countries, Dr David O’Brien, an assistant professor at the University of Nottingham Ningbo China, told RT.