Putting an embargo on Huawei, the US could suffer huge losses 0Putting an embargo on Huawei, the US could suffer huge losses 0

(Dan Tri) – President Donald Trump’s declaration of a national emergency in technology to pave the way to ban Huawei will likely make Beijing angry and the first `victims` will be American technology companies.

US President Donald Trump met Chinese President Xi Jinping in Beijing in 2017. (Photo: Reuters)

On May 15, the US Department of Commerce announced that it would put Huawei and 70 affiliates on the list of subjects banned from purchasing parts and components from US companies without US government approval.

President Trump’s executive order prohibits US companies from using telecommunications equipment in groups considered by the Department of Commerce to pose a risk to US national security.

Previously, Huawei was repeatedly accused of espionage and violating US law.

“This move clearly targets Chinese espionage through (the Huawei embargo), although it has not yet been specifically proven,” said analyst Tim Bajarin at research firm Creative Strategies Inc.

“China could respond by banning American products from the Chinese market, for the same reason.

Given that the US and China have recently imposed tariffs on hundreds of millions of dollars of each other’s goods, a Chinese embargo on US companies could lead to serious problems.

Analyst Dan Ives at consulting firm Wedbush said that President Trump’s threat is a warning shot to China ahead of the G20 summit in Japan next month.

“We still think it’s just a threat, but this move also contributes to increasing tensions as technology investors are always worried.

Tensions escalated

Putting an embargo on Huawei, the US could suffer huge losses

Huawei is a giant telecommunications corporation and is considered the pride of China.

China can respond to the US and target leading technology companies such as chip manufacturers Nvidia, Qualcomm and Intel.

After the US prosecuted Huawei chief financial officer Meng Wanzhou last December, analyst Stacy Rasgon once said Huawei `is a giant buyer of semiconductors` from the US.

According to analyst Rasgon, “the supply chain can self-adjust” to help minimize the impact of the Huawei ban on US chip companies.

“If (US) semiconductor companies cannot sell to Huawei, thereby making Huawei unable to sell their equipment, other companies can take Huawei’s place and (US) can sell to companies

However, according to analyst Rasgon, the transfer process may be messy.

“It could be companies selling computers or telecommunications equipment.

Analyst Dan Ives believes that the most vulnerable target is Apple, America’s most famous technology company.

Crawford Del Prete, president of research firm IDC, said China’s response may not affect other areas of technology immediately.

“For Huawei, they need to focus and send the message that they are not a security threat, so they can maintain business operations outside the US,” Mr. Prete said.



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