Business World

Sunday 15 September 2019

My way or the Huawei - Trump to make key decision

Donald Trump: US president is expected to extend the temporary licence which expires today. Photo: REUTERS/Jonathan Ernst
Donald Trump: US president is expected to extend the temporary licence which expires today. Photo: REUTERS/Jonathan Ernst

David Chance

US President Donald Trump is set to make a key decision on Chinese tech firm Huawei today that holds the key to relations between the two countries amid brinkmanship in a burgeoning trade war.

The escalating trade war between the world's two economic superpowers has caused stock markets across the globe to tank and increased fears of a global recession that could hit hard here in Ireland.

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Huawei is a crown jewel at the forefront of China's high-tech industry push.

It is involved in the construction of some of the 5G high speed telecoms networks here and it vies with Apple as the world's second largest smartphone maker.

It has been banned from buying US tech equipment as Washington says the company's phones and networking equipment are used to spy on other nations, something the Chinese company denies.

Today, a temporary licence that allowed US tech firms to continue fulfilling legacy supply contracts with Huawei is set to expire.

"This story shows no signs of abating as the US considers extending scrutiny to other Chinese tech firms and Beijing prepares its 'Unreliable Entity List' of firms subject to export controls," said Eleanor Olcott, China policy analyst at London-based economic consultancy TS Lombard.

"Meanwhile, the US diplomatic campaign to get allies to freeze Huawei out of any role in 5G networks will continue in earnest - only adding to Beijing's feeling that it is being unfairly targeted by the US," Ms Olcott wrote in a report on the dispute.

The Chinese company has released a new operating system which it says will be ready to use across its smartphones and TVs to replace Google's Android, which will be subject to sanctions.

Ms Olcott believes that Mr Trump will most likely extend the temporary licence and allow exports by US firms on a case-by-case basis.

"Even after the breakdown of talks… we continue to think this is the most likely outcome as it would enable Trump to keep appearing tough on Huawei while providing a lifeline to US suppliers," she said.

Irish Independent

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