c.2019 New York Times News Service
The Chinese technology giant Huawei on Monday began feeling painful ripple effects of a Trump administration order that effectively bars U.S. firms from selling components and software to the company.
Huawei said that Google was cutting off its access to support for many Android hardware and software services. The move, in response to last week’s announcement in Washington, could hamstring Huawei, the world’s second-largest smartphone-maker, if it ultimately restricts access to the latest versions of popular Google services such as Maps and Gmail.
Google said its services would continue to function on existing Huawei devices.
“We are complying with the order and reviewing the implications,” the tech company said.
Google’s decision to halt work with Huawei was first reported by Reuters.
In isolating Huawei, the Trump administration is escalating a trade dispute with Beijing and harming a company that U.S. authorities have long accused of posing a national security risk — charges that Huawei has vehemently denied. After struggling to convince allies like Britain and Germany to block the use of Huawei telecommunications equipment, the Trump administration is now undermining Huawei’s business by cutting off its access to crucial U.S. suppliers, including chipmakers.
In complying with the Commerce Department’s order, Google is undercutting ties with an important and fast-growing partner. Huawei’s sales in the first quarter of 2019 grew 50% compared to the same period a year earlier, even as the broader smartphone market stagnated, according to the market research firm IDC.
While Huawei products have effectively been blocked in the United States for years, the company’s business has grown rapidly in Africa, Asia and Europe, where its affordable prices have been embraced by consumers and by phone companies that use its antennas, base stations and other equipment to make wireless networks.
President Donald Trump last week issued a ban on U.S. telecommunications firms’ installing foreign-made equipment that could pose a threat to national security. The order instructed Commerce Secretary Wilbur Ross to stop transactions “posing an unacceptable risk.” While it did not single out any company by name, the order was widely believed to be aimed at Huawei and others in China’s tech sector.
On the same day, the Commerce Department added Huawei to a list of companies deemed a risk to national security, effectively preventing the company from buying U.S. parts and technologies without special permission from Washington. Since then, chipmakers including Infineon, Intel and Qualcomm have told employees to cease working with Huawei until further notice, according to Bloomberg and other news outlets. Intel declined to comment, while Qualcomm and Infineon did not immediately respond to requests for comment.
On Monday, shares in Qualcomm and Infineon were trading about 5% lower. Intel was down more than 1%.
Huawei has not yet said how it will respond to the Trump administration order, but the Chinese government Monday suggested a legal challenge. Asked about Google’s decision at a regularly scheduled news briefing Monday, Lu Kang, a spokesman for the Ministry of Foreign Affairs, said: “China encourages Chinese companies to take up legal weapons to defend their own legitimate rights.”
In a statement, Huawei said: “We have made substantial contributions to the development and growth of Android around the world. As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefited both users and the industry.”
The U.S. campaign against Huawei comes as countries around the world prepare to build next-generation wireless networks, known as 5G, that are predicted not only to bring faster cellular service but also to connect new devices such as autonomous cars, medical tools and industrial equipment to the internet.
The Trump administration has urged allies including Britain and Germany to ban Huawei from supplying equipment for the new high-speed networks, although the countries have signaled they are unlikely to completely bar the company.