US president Donald Trump has granted some relief to the Chinese smartphone giant by allowing U.S. companies to sell goods to the embattled Chinese tech firm following more than a month of uncertainty. Over the past few months, there has been a pretty messed up situation between both the US and China.
But now the American government added it and 70 of its affiliates to an “entity list” which forbids U.S. companies from doing business with it. The consequences of this move were huge all over Huawei’s networking and consumer device businesses. A few of the Chip companies were being forced to cut all of its ties whereas Google which provides its Android software for Huawei devices also terminate its relationship with the country.
Huawei founder and chief executive Ren Zhengfei said recently that the ban would cost the Chinese tech company some $30 billion in lost revenue of the next two years, as they are the world’s third largest seller of smartphones. To cool down the current situation President Donald Trump and Xi Jinping President of China agreed to a truce between both the nations. Previously, it expected that negotiations were merely on a political basis, instead, Mr. Trump granted Huawei some relief by allowing US-based companies to resume sales.
Although the US administration is now expected to conduct meetings on how to deal with Huawei and its presence on the entity list because the relief does not explicitly remove Huawei from the list. The announcement made during the G20 summit this weekend. The decision comes as a major relief for all the stakeholders working in both countries. At first executive order, the US-based companies like Google, Qualcomm, ARM, and many others had suspended business with Huawei. Not they all can resume it in a limited form after the Chinese company was granted a “temporary general license”.
Because of the uncertainty in which Huawei and its smartphones were involved over the past few months. Its international smartphone sales to drop by as much as 40-60%. Devices like the Honor 20 Pro was one of the first victims of the trade ban, as the availability of the phone was no longer available. Now, with this relief on the front, we expect companies to resume their business operations with Huawei and Honor.
Despite the good news, the mutual trust between the two countries is broken and things would not be the same again. The recent step in a series of strategies in its ongoing trade battle with China exemplifies just how dependent the company has become on the U.S. to simply function. Huawei has already started taking steps to make itself independent of the Android operating system and its own backup chips.