China ready to retaliate against Apple after U.S. moves to ban chip shipments to Huawei
China is readying financial countermeasures against U.S. companies like Apple and Qualcomm after the US government executed the process to block Huawei's global semiconductor supply.
China is ready to place U.S. companies on an "unreliable entity list" after the U.S. government moved to block chip shipments to Huawei.
On Friday, the Trump administration said it would amend an export rule to block shipments of semiconductors that are the "direct product of certain U.S. software and technology," Reuters reported.
In response, the Chinese government reacted swiftly. It's preparing a series of countermeasures, including putting U.S.-based companies on an "unreliable entity list," imposing restrictions on companies like Apple, and launching investigations, the Global Times reported.
"China will take forceful countermeasures to protect its own legitimate rights," a source told the Global Times, a subsidiary newspaper of China's Communist Party.
Beijing appears to be specifically targeting U.S. companies that are highly dependent on the Chinese market, including Apple, Qualcomm, Cisco and Boeing.
Huawei is at the center of a broad struggle for technological dominance between the U.S. and China.
In May 2019, the U.S. government imposed a ban on Huawei that barred it from acquiring American technology. It also banned U.S. telecom firms from using Huawei-produced equipment.
That ban inspired a "Boycott Apple" movement in China, with some companies in the country threatening to fire employees who used the company's products instead of Chinese ones.
Despite the ban, Huawei has continued to use U.S. software and technology, the Commerce Department said, hence Friday's move to amend an export rule.
The U.S. is also attempting to convince its allies not to use Huawei infrastructure in the global rollout of 5G, citing concerns that the Chinese company's products could be used for espionage. Huawei denies those claims.
China is ready to place U.S. companies on an "unreliable entity list" after the U.S. government moved to block chip shipments to Huawei.
On Friday, the Trump administration said it would amend an export rule to block shipments of semiconductors that are the "direct product of certain U.S. software and technology," Reuters reported.
In response, the Chinese government reacted swiftly. It's preparing a series of countermeasures, including putting U.S.-based companies on an "unreliable entity list," imposing restrictions on companies like Apple, and launching investigations, the Global Times reported.
"China will take forceful countermeasures to protect its own legitimate rights," a source told the Global Times, a subsidiary newspaper of China's Communist Party.
Beijing appears to be specifically targeting U.S. companies that are highly dependent on the Chinese market, including Apple, Qualcomm, Cisco and Boeing.
Huawei is at the center of a broad struggle for technological dominance between the U.S. and China.
In May 2019, the U.S. government imposed a ban on Huawei that barred it from acquiring American technology. It also banned U.S. telecom firms from using Huawei-produced equipment.
That ban inspired a "Boycott Apple" movement in China, with some companies in the country threatening to fire employees who used the company's products instead of Chinese ones.
Despite the ban, Huawei has continued to use U.S. software and technology, the Commerce Department said, hence Friday's move to amend an export rule.
The U.S. is also attempting to convince its allies not to use Huawei infrastructure in the global rollout of 5G, citing concerns that the Chinese company's products could be used for espionage. Huawei denies those claims.
Comments
If this becomes a public issue, the US public will stand up for the US, and the country will not cave.
If left to backroom politics, the story may be very different.
Sure the State is going to order Huaweis and can push back against Boeing and do nothing to help Qualcomm collect its licensing revenue from Chinese firms, but it's not really incentivized to kill the manufacturing of, or domestic sales of, most of the higher-end phones sold globally and across China. The suggestion of "investigating" Apple among "companies that block or shut supply chains, or take discriminatory measures for non-commercial reasons" doesn't seem like it would get very far.
There will be pain.
This is the singling out of one company with the desire to kill it because it represents a technological threat to U.S 'interests' worldwide.
If this were about 'trade' , more would have been done against other nations (the U.S trade deficit is with the rest of the world, not just China).
As it is, on purely trade terms, putting Huawei and its affiliates on the entity list severely impacted scores of U.S tech interests to the tune of billions. It impacted U.S farming interests which had to be bailed out more than once (also to the tune of billions). Until very recently it was impeding its own national companies from participating on standards boards across the world where Huawei also had seats. There is no worse way to act against your own interests than that. These are meetings where the future of tech is hammered out.
As a result China has accelerated its tech advancements (already taking a huge lead with a key economic enabler: deployment of 5G). Huawei has largely excised itself of U.S supply options ($11B going straight to non-US direct competitors) AND accelerated its own technological advances. It was estimated that that action would have a direct impact on jobs at those companies. He has literally shackled U.S tech companies who want to do business with Huawei. Over 130 licence requests have been made to the Department of Commerce. Now his actions may well impact scores of other U.S companies who have no business relation with Huawei.
Anyone who has commercial interests that use U.S technology will now be scurrying to find alternatives to have a plan B close to hand, should they find themselves sucked into a similar situation to Huawei. Many already were. The EU declared its own plans to increase its technological independence around the time Trump came to office. That was another hit for U.S interests.
Phase 1 may well be dead in the water (it was never that much anyway) after this latest move.
More than rocking the boat, he has capsized it IMO. The problem is it is his own boat. More than 'negotiating' he has bullied allies and non-allies. Allies who have basically had enough. Just look at the Iran sanctions debacle but that is geopolitics, not just trade.
He said he liked trade wars although he had zero experience with them. He said they were easy to win.
We will just have to watch as he demonstrates just how easy this one will prove to win.
Meanwhile the evidence to back up the accusations against Huawei still haven't appeared.
Huawei was being used as a pawn.
Now Apple runs the risk of suffering tit-for-tat measures.
Unable to compete (the U.S has no homegrown 5G options) Trump wants to draw a digital iron curtain between East and West.
Okay, okay, okay. I'll play along. Since I guess we're only supposed to look at successes instead of a totality of business decisions, what business successes should we be using to evaluate Trumps acumen as a businessman?
On topic: Dealing with the Chinese can be hard. They are willing to make decisions that can, not only hurt their competitor (in this case the US), but adversely affect their citizens because they aren't worried about being voted out of office. US politicians have to worry if their decisions will negatively affect US citizens because we have the ability to boot them.
Just look at what the U.S government has done with gear from companies like Cisco and carriers like AT&T. Or the Crypto scandal. Operation Shot Giant.
Just browse some of the Snowden leaks.
You don't have to be a 'brutal totalitarian dictatorship' to spy on all and sundry or do far worse things.
If Huawei phones can't be distributed fairly in the U.S. why can't China do exactly the same with iPhones?
Just two years ago AT&T was fired up and ready to give Huawei it first major carrier distribution deal on U.S soil. Then it was pressured out of the deal by government.
As for Boeing, if things weren't already bad enough (the MAX fiasco), China just cancelled orders for nearly 30 MAX aircraft and the prospect of losing all Boeing orders from China (trillions of dollar's worth over the coming decades) would destroy the commercial aviation business in the U.S. Of course Airbus is salivating right now having had a special delegation working with China for over a year already.
Let's not forget that trillions of dollars (euros!) going to Airbus would not come 'free' . Nudge, nudge, wink, wink.