A Ban Won’t Stop Huawei’s Technological Evolution.

By Joy Tan, Senior Vice President, Public Affairs, Huawei Technologies USA

When President Trump signed an order in May 2019, it was essentially designed to keep Huawei out of digital wireless networks in America. Along with the executive order, the Commerce Department banned American companies from selling components to Huawei. Not being able to work with our American suppliers is a major hurdle for Huawei because approximately one-third of our product components are sourced from the United States and today’s supply chain is global and interconnected.

For those speculating whether Huawei can overcome these bans and continue focusing on delivering amazing products and technology to our customers, the answer is yes. Stemming from our longstanding commitment to consumers, we has been diligent about supply continuity, spending more than a decade creating systems and innovating various technological supply solutions. Because our supply chain is extremely diverse – key components are produced by a variety of channels, sources and countries – our multinational company will continue to operate regardless of such supply challenges.

By targeting Huawei, the U.S. will actually hurt American companies. This is based on the fact that U.S. companies earned $11 billion a year by selling to Huawei – creating 40,000 – 50,000 jobs. Banning Huawei would eliminate this revenue and potentially result in U.S. companies having to reduce or cease research and development initiatives, hampering their technological development. We have already seen American companies’ lower revenue projections as a result of these decisions by the U.S. government.

Further, the restrictions inflicted by the Trump administration on Huawei could have a negative impact on digital technology as a global industry. Intercountry disputes and lack of collaboration on creating technical standards can diminish our progress in digital technology on a global scale. Incompatible political agendas will deteriorate advancements in technology through reduced market competition, higher costs (for subpar goods) and lower investments by companies – causing a negative impact on overall digital transformation.  

The U.S. lashing out on Huawei can gravely impair the global trading system, where free trade and open markets serve as catalysts for future growth as well as poverty reduction. The current administration seems to take a contradictory stance on international trade, believing that governments should have more control than market supply-and-demand.

The White House’s fundamental motivation to take action against Chinese companies comes from their belief that these companies are threatening national security and compromising well-established foreign policies. Protecting networks by blacklisting certain companies is a baseless/naive approach that would certainly affect the global supply chain. Instead, the Trump administration should advocate for and support a coordinated international response to tackle those with criminal intent.    

This ban on Huawei has already disturbed the telecommunications and technology industries substantially in the short-term, but I don’t believe this will result in a permanent divide in the global digital technology market. As I’ve said, a top-down ban will ultimately be rescinded by a bottom-up force; the American business community has and will continue to voice their disapproval of the ban on Huawei and other companies. This resistance will only grow into outrage as more American businesses and consumers lose out. Some companies are already working around the ban to continue selling to Huawei.  This ban also hurts America’s reputation worldwide, damaging its credibility as a global leader. Other countries in the world are not following suit as they understand the significance of technical growth. For example, the United Kingdom inculcated a cybersecurity model where a third party independently evaluates Huawei’s technology, and this allowed them to be one of the first to launch a 5G network.   

If we’ve learned anything from history, it is that any efforts to limit free trade results in weaker markets and vulnerable economies. As we saw in past instances with the rollout of 2G, 3G and 4G wireless networks, contradictory standards lead to expensive and inaccessible technology.
Huawei welcomes the era of 5G, a natural progression brought by market demand in the digital technology industry. Politicians who are attempting to intervene with open markets to cling to a false sense of superiority in the world are yet to witness the power of supply and demand.