Affiliate Ban Would Effectively Kill Off US Market for Huawei

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The U.S. has added 46 affiliates of Chinese telecom networking giant Huawei to its banned list, also pushing out a ban on using the company’s equipment by another 90 days. According to US Commerce Secretary Wilbur Ross, the list of banned Huawei affiliates and subsidiaries is now more than 100 companies. Those partners have been instrumental in liaising for Huawei, and the ban will effectively kill off the entire US market for the company, one of the leaders in 5G networking equipment.

The Commerce Department cited the numerous rural communications companies using the company’s products as the reason for the delay on what has been a contentious and politicized ban. The 90-day extension pushes out the deadline to eliminate Huawei equipment to November, leaving rural companies scrambling to replace their infrastructure. Huawei’s affordable networking equipment has been a popular choice among smaller communications providers for decades.

The affiliate ban sparked escalating tensions at the networking company, along with a leaked internal memo from Huawei CEO Ren Zhengfei warning of job and salary cuts. According to Bloomberg, the memo cites the ban and affiliate restrictions as a “live or die moment” for the company and its employees.

"We oppose the US Commerce Department's decision to add another 46 Huawei affiliates to the Entity List," said Huawei in its official response to the announcement. "It's clear that this decision, made at this particular time, is politically motivated and has nothing to do with national security -- we call on the US government to put an end to this unjust treatment and remove Huawei from the Entity List.”

President Trump initiated the band on equipment from Huawei and Chinese telecom manufacturer ZTE earlier this year, citing potential threats to national security. The move has created friction among US tech companies, with Google limiting access to its Android software and components and Intel doing the same for its processors. No US companies have been granted licenses to continue business with Huawei, despite the Commerce Department stating last month that it would issue licenses where there is no threat to US national security.




Edited by Maurice Nagle
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TechZone360 Contributing Editor

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