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| URL | https://finance.yahoo.com/news/huawei-ban-in-us-will-lead-to-global-ripple-effect-112826645.html |
| Last Crawled | 2026-01-12 20:41:58 (3 months ago) |
| First Indexed | 2019-05-16 12:30:00 (6 years ago) |
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| Meta Title | Huawei ban in U.S. will lead to 'global ripple effect' |
| Meta Description | U.S. actions banning Huawei from buying components from American companies won't just hurt the Chinese company, but lead to a "global ripple effect." |
| Meta Canonical | null |
| Boilerpipe Text | Washingtonâs fight with Huawei Technologies escalated to a new level Wednesday, after the Department of Commerce moved to ban the telecommunications giant from buying parts and components from U.S. companies.
The dramatic move came hours after President Donald Trump signed an executive order enabling the U.S. to ban telecommunications equipment from âforeign adversariesâ that are âincreasingly creating and exploiting vulnerabilitiesâ in information and communications technology. While the Presidentâs order did not single out Huawei or China, it follows days of tit-for-tat moves between Washington and Beijing, with both sides raising tariffs in the ongoing trade dispute.
The Chinese company said the latest salvo would limit U.S customers to âinferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deploymentâ in a statement released to Yahoo Finance. It added âunreasonable restrictions will infringe upon Huawei's rights and raise other serious legal issues.â
âThe question is, is this the Trump administration now pulling out all the stops in a crucial moment of the trade negotiations in a last ditch effort to get the Chinese side to the table,â said Samm Sacks, a Cybersecurity Policy and China Digital Economy Fellow at New America. âI suspect not, because what Iâve seen from both sides is a determination to dig in. Itâll be very difficult to walk this one back.â
Commuters walk by the new Huawei P30 smartphone advertisement on display inside a subway station in Beijing Monday, May 13, 2019. China's intensified tariff war with the Trump administration is threatening Beijing's ambition to transform itself into the dominant player in global technology. (AP Photo/Andy Wong)
The Department of Commerce order places Huawei and 70 affiliates on a so-called âentity-list,â and requires the company to obtain a government license to buy or transfer American technology. The department said it had âa reasonable basis to conclude that Huawei is engaged in activities that are contrary to U.S. national security or foreign policy interest,â citing its alleged attempt to cover up prohibited financial services activities to Iran, revealed in a 13-count indictment hat was unsealed in January.
U.S. actions banning Huawei from sourcing U.S. components marks a serious blow to the company, at a time when it is looking to win 5G contracts globally. A company spokesperson said Huawei spent $16 billion on procurement within the U.S. last year, although he didnât specify how significant that amount was, in relation to its parts suppliers globally.
The Commerce Departmentâs order could also hurt U.S. suppliers, including Qualcomm, Broadcom, and Western Digital A similar purchasing ban on Huaweiâs Chinese rival ZTE, which counts Qualcomm as one of its biggest suppliers, nearly crippled the company last year.
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# Huawei ban in U.S. will lead to 'global ripple effect'
[](https://finance.yahoo.com/author/akiko-fujita)
[Akiko Fujita](https://finance.yahoo.com/author/akiko-fujita) ¡ Host
UPDATED
May 16, 2019
IN\_THIS\_ARTICLE:
Washingtonâs fight with Huawei Technologies escalated to a new level Wednesday, after the Department of Commerce moved to ban the telecommunications giant from buying parts and components from U.S. companies.
The dramatic move came hours after President Donald Trump signed an executive order enabling the U.S. to ban telecommunications equipment from âforeign adversariesâ that are âincreasingly creating and exploiting vulnerabilitiesâ in information and communications technology. While the Presidentâs order did not single out Huawei or China, it follows days of tit-for-tat moves between Washington and Beijing, with both sides raising tariffs in the ongoing trade dispute.
The Chinese company said the latest salvo would limit U.S customers to âinferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deploymentâ in a statement released to Yahoo Finance. It added âunreasonable restrictions will infringe upon Huawei's rights and raise other serious legal issues.â
âThe question is, is this the Trump administration now pulling out all the stops in a crucial moment of the trade negotiations in a last ditch effort to get the Chinese side to the table,â said Samm Sacks, a Cybersecurity Policy and China Digital Economy Fellow at New America. âI suspect not, because what Iâve seen from both sides is a determination to dig in. Itâll be very difficult to walk this one back.â
Commuters walk by the new Huawei P30 smartphone advertisement on display inside a subway station in Beijing Monday, May 13, 2019. China's intensified tariff war with the Trump administration is threatening Beijing's ambition to transform itself into the dominant player in global technology. (AP Photo/Andy Wong)
## **âIt would hit virtually all of Huaweiâs productsâ**
The Department of Commerce order places Huawei and 70 affiliates on a so-called âentity-list,â and requires the company to obtain a government license to buy or transfer American technology. The department said it had âa reasonable basis to conclude that Huawei is engaged in activities that are contrary to U.S. national security or foreign policy interest,â citing its alleged attempt to cover up prohibited financial services activities to Iran, revealed in a 13-count indictment hat was unsealed in January.
U.S. actions banning Huawei from sourcing U.S. components marks a serious blow to the company, at a time when it is looking to win 5G contracts globally. A company spokesperson said Huawei spent \$16 billion on procurement within the U.S. last year, although he didnât specify how significant that amount was, in relation to its parts suppliers globally.
The Commerce Departmentâs order could also hurt U.S. suppliers, including Qualcomm, Broadcom, and Western Digital A similar purchasing ban on Huaweiâs Chinese rival ZTE, which counts Qualcomm as one of its biggest suppliers, nearly crippled the company last year.
STORY\_CONTINUES
Full implementation of the entity list would not only put Huawei at risk but its network of suppliers around the world, according to Eurasia Group.
âThe firm would be unable to upgrade software and conduct routine maintenance and hardware replacement,â Eurasia Group analysts said in a note. âIt would hit virtually all of Huaweiâs products, including high-end smart phones, mobile infrastructure, data centers and cloud services.â
The one-two punch Wednesday follows a months long campaign by the U.S. to convince allies to ban Huawei equipment from their 5G infrastructure, on national security concerns. While countries like Australia and New Zealand have followed suit, the Europeans have largely taken a more nuanced approach, choosing to integrate Huawei equipment with additional security measures in place.
Sacks said U.S. actions would lead to a âglobal ripple effectâ with so many countries relying on Huawei equipment for its mobile infrastructure.
âThink about the European companies and networks in Europe that rely on Huawei gear,â she said. âHuawei is dependent on U.S. components. So if they canât (buy them), this is not just a U.S.-China issue anymore,â she said.
â
*Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter at* [***@AkikoFujita***](https://twitter.com/AkikoFujita?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor)
**More from Akiko:**
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- [Really bad business practice': U.S. security experts sound off on Huawei](https://finance.yahoo.com/news/huawei-security-china-us-162604693.html)
- [U.S.-China showdown: Huawei has 'completely taken over' the Mobile World Congress](https://finance.yahoo.com/news/huawei-china-mobile-world-congress-193306392.html)
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