China calls out U.S. as Huawei faces fresh setbacks

Posted May 25, 2019

The company's online store no longer has the product listing for the Huawei laptop.

"What we are witnessing is a potential reconfiguration of global trade as it has stood since World War II. investors should begin thinking about how sensitive their portfolios are to global supply chain-exposed shocks", Saxo Bank's head of equity strategy, Peter Garnry, wrote in a note titled, "Are you ready for a cold war in tech?"

But it was followed up soon with an announcement from the U.S. Commerce Department to add Huawei to the 'Entity List, ' implying the Chinese company would require approval before doing any kind of business within the U.S. Huawei phones and certain telecommunications equipment have already been banned from U.S. military bases.

British chip designer ARM halted relations with Huawei [HWT.L] to comply with a USA blockade of the company, potentially crippling the Chinese telecom company's ability to make new chips for its future smartphones.

This new commerce ban does not stop USA companies from buying Huawei gear, but instead bans Huawei from obtaining its supply chain components from USA companies.

When asked for its response, Huawei pointed to a statement on Panasonic's Chinese website that said the firm was supplying Huawei "normally" and "strictly abiding by the relevant laws and regulations of countries and regions where Panasonic is present".

In other words, "until we get the information and confidence that gives us the long-term surety that our customers, when they buy those devices [Huawei phones], are going to be supported for the lifetime they've got the device with us", said Marc Allera, CEO of the BT Group's consumer brands.

Mobile phone service providers in Japan, Taiwan and Britain on Wednesday said they had stopped taking early orders for new smartphone models from the company or had ditched plans to offer handsets equipped for fifth generation wireless networks.

Washington's restrictions affect products made fully or partially in the U.S., where Panasonic manufactures some of its components.

Investors and industry experts are now watching to see how United States technology companies may alter their relationship with Huawei following the blacklisting and the impact these changes may have on the Chinese company and its partners.

If that weren't enough, several mobile service providers in the United Kingdom and Japan have said they may not offer Huawei phones to 5G customers. Last year Arm China was setup to develop, sell and offer support for its products in the region.

Huawei is now in the midst of a 90-day grace period where it can still conduct business with U.S. companies before the effects of being in the Entity List come into force on August 19. If it's down to governmental pressure, then the impact here is further reaching than anticipated.

"It's kind of embarrassing to pull an iPhone out of your pocket nowadays when all the company executives use Huawei", he said.