US considering blocking all sales to Chinese firm Huawei as technology war heats up

Tensions have flared between the US and China after the Biden administration announced plans to take executive action against the nation’s technology industry.

Tensions have flared between the US and China after the Biden administration announced plans to take executive action against the Chinese technology industry, this time with Huawei Technologies in its sights.

The US is looking at cutting the Chinese tech giant off from all its American suppliers, including heavyweights Intel and Qualcomm, as the government continues to crack down on China’s tech sector.

For the past four years, sales from US companies to Huawei have been limited, ever since the former president, Donald Trump, added the Shenzhen-based company to the so-called “entity list” over national security concerns. This meant that American suppliers needed government approval just to sell to Huawei.

But now, some members of the Biden Administration are pushing for an all-out ban on sales to Huawei.

A man uses his mobile phone as he walks past a poster of Huawei P40 in Beijing (Photo by WANG Zhao / AFP)

Last week, the Biden administration persuaded Japan and the Netherlands to join with the US in restricting exports of advanced semiconductor machinery to China.

Huawei has long been suspected of being tied to the Beijing government and the Chinese military, and the Administration is now debating whether to adjust its licensing policy.

Chinese officials reacted in anger to the gesture against Huawei, slamming “paranoid” legislations in Washington that could cost its tech sector millions.

“China is deeply concerned,” Mao Ning, a spokesperson for the country’s foreign ministry, said at a briefing on Tuesday. “We are closely following relevant developments.”

“China firmly opposes the United States’ generalisation of the concept of national security, abuse of state power, and unreasonable suppression of Chinese companies.”

Mao Ning said the ban would “violate international economic and trade rules” and give US companies an unfair edge over the global market.

Ma Jihua, a telecom analyst, said the US was “hammering entrepreneurs’ thriving confidence” in China.

“Washington’s logic works like this: If the US was able to beat down Huawei, a symbol of China’s tech prowess, it could cripple the upward momentum of the Chinese tech industry, and hammer entrepreneurs’ thriving confidence. But the strategy conspicuously did not work,” he said via the Global Times this week.

“Washington is taking advantage of the potential ban on a signature Chinese tech company, to showcase its allies that it occupies a dominant position in the chip and tech industry chain.”

A man walks under an advertisement for Chinese telecoms company Huawei's latest phone in Tokyo. (Photo by Kazuhiro NOGI / AFP)

Privacy concerns over technology from China has remained a major talking point in recent years as the nation continues to grow its influence overseas, primarily through the social media TikTok.

The US Government previously said Huawei posed a national security threat, while Australia also blocked the company from bidding for the National Broadband Network (NBN).

And in a Bloomberg News investigation has revealed a reported breach of Australia’s telecommunications system was communicated to the US in 2012.

It claims the breach started with a software update from Huawei that was “loaded with malicious code” and installed on the Optus network

Huawei’s founder Ren Zhengfei previously sparked concern in China after warning of a “very painful” decade ahead in 2022.

He forecast that China would suffer through tough market conditions and indicated Western sanctions were threatening the conglomerate’s existence.

He sent a blunt company-wide memo to staff in August, warning that Huawei was simply trying to survive by focusing on cash flow and profit and that expansion and growth was no longer a priority.

The logo of Chinese company Huawei. (Photo by DANIEL LEAL-OLIVAS / AFP)

The tensions between the US and China have been rising steadily during Biden‘s presidency, and he’s feeling the pressure from the Republicans controlling the House to continue squeezing Beijing, particularly when it comes to limiting the country’s technological advances.

A number of North American tech companies have already announced a series of mass lay-offs amid China’s capitalisation of the market, primarily through Tik Tok.

The once-unassailable tech sector, which is now facing a huge downturn, appears to be on dire straits following decades of insurmountable growth.

Google recently announced would slash nearly 12,000 jobs worldwide, as online retail giant Amazon revealed similar cutbacks.

Amazon will scrap 18,000 jobs from its workforce, citing “the uncertain economy” and the fact it had “hired rapidly” during the pandemic.

During Covid, Amazon had gone on a hiring spree to meet an explosion in demand for deliveries, doubling its global staff between the beginning of 2020 and start of 2022.

Meta, the company that oversees Facebook, is facing similar struggles.

In what Mark Zuckerberg called “the most difficult changes we’ve made in Meta’s history,” the CEO of the company that also owns Instagram and WhatsApp announced 11,000 job cuts in November, about 13 per cent of the company’s staff.

Zuckerberg told his 87,000-strong employees he had expected the boost in e-commerce and online activity during the pandemic to continue, but admitted he had been wrong.

Meta’s poor performance in 2022 sent its share price plummeting, as well as a sharp drop in sales and stagnation in its user numbers.

Originally published as US considering blocking all sales to Chinese firm Huawei as technology war heats up