Huawei ban harms global supply chain: experts

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DailySweden

Huawei ban will have an impact on global supply chains and the additional tariffs imposed by the United States on Chinese products will impede the development of technological capabilities, said experts.

The U.S. Department of Commerce on Monday issued a 90-day temporary license for Chinese tech giant Huawei, loosening the restrictions imposed last week when the company was added to a blacklist by the White House.

The Temporary General License, effective from May 20 through Aug. 19, allows “specific, limited engagement in transactions involving the export, reexport, and transfer of items” to Huawei, the department said in a statement.

The Bureau of Industry and Security (BIS) of the department put Huawei and its affiliates on an “Entity List” on May 16, which would restrict the sale or transfer of U.S. technologies to Huawei.

Zhang Jianping, director general of Center for Regional Cooperation under Chinese Academy of International Trade and Economic Cooperation, said that Huawei has focused on IT and telecommunication for three decades and has provided equipment and services to over 100 countries all over the world. In addition, it’s leading the world in 5G.

“Huawei will be leading this field, but the United States cannot accept this situation in the future, this is the first point. And second one I like to say Huawei, actually behind Huawei, more than 100 countries, their parts, their services will be provided to Huawei and assembled in China and in other countries, and then exported to global market. In that process, if U.S. punished Huawei, that means U.S. punished all of those partnerships in the world,” he said.

He added that most of the companies in the global supply chain will work together to avoid the possible negative effects caused by the trade dispute.

In confronting the U.S. restrictions on Huawei, many countries have also showed their stance by not blocking Huawei in their countries and region, such as France, Canada, Germany and the United Kingdom.

With the United States, a total of 173 U.S. companies including Nike, Adidas and other shoemakers signed an open letter to the U.S. president on Monday to urge President Donald Trump to reconsider the proposed tariffs on shoes made in China, saying the policy would be “catastrophic for their consumers, companies and the American economy as a whole.”

“I think that we have also reached the tipping point however though when the rhetorical angers and accusations have spilled over into real policy actions. So 15 to 25 percent tariffs are real policy actions. And that means American consumers pay enhanced taxes and Chinese producers pay higher terms of what they have to do to enter the U.S. market. I think people haven’t really figured out is that will quickly become rationing and redistribution of technological capability in contracts, and once you put your finger on the scale that measures global success, there are a series of ripple effects that are both hard to foresee and quite problematic from an efficiency perspective,” said Max Wolff, managing partner at Multivariate.

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