China Prepares A Counter Strike On The Huawei Ban
Trade relations between the US and China are rising in intensity again with China preparing for a response against the US ban on Huawei. The southeast Asian country has taken special measures to restrict the trade of rare earth elements to the US, placing the western country in its own ‘entity’ list. This puts the US in a blacklist as an unfavourable foreign company.
Japan’s SoftBank, taking the market opportunity has announced its plans for building its 5G network with equipment from Nokia and Ericsson amidst the turmoil. Huawei prior to this had been the supplier for 4G and was planned to collaborate alongside SoftBank for the same.
The restrictions on rare earth elements stand as a signal from the Beijing leaders of its willingness to retaliate with countermeasures in place. This, however, is reported to only be actually deployed if the trade war between the US and China worsens with time. One of the important rare elements derived from China is Neodymium, a popular industrial grade element used to make magnets. It is often seen advertised spec sheets of audio gear such as earphones and headsets. The US according to various trade experts and researchers have no outside alternative worthwhile apart from China.
The Chinese phone manufacturer, Huawei sits in the middle of the trade war zone. Taking a massive hit on its business with the loss of its huge deal with SoftBank related to 5G networking. This incident came after Huawei was claimed to be a national threat by the US President Donald Trump and placed in the Bureau of Industry and Security’s Entity List that has its business operations in America crippled.
Actions questioning Huawei’s networking equipment and services have never been raised although concerns regarding security have driven its potential business operations away from it. The company’s affiliation with the Chinese Government only worsens relations with foreign companies like the Japanese SoftBank who’s decision is only a result of such accusations thrown about. Regardless of how soon or how smoothly the trade tensions die out, Huawei’s brand trust with confidentiality in mind will remain as trauma in the minds of its future partners.