Huawei issues warnings after Imposition of new trade restrictions by US

The telecom giant Huawei issued warnings on Tuesday that the current year would be its most difficult year because of US  trade restrictions which exacerbated its overseas sales in 2019. They predicted that Chinese government would take some action in response to the United States.

Huawei, being the world’s largest maker of telecoms equipment reported its lowest annual profit growth in three years. The telco giant told that Beijing could retaliate against US measures to restrict chip sales to Huawei, by restricting sales of US products and equipment in China and by moving to alternative suppliers in China and South Korea.

Huawei issues warnings after Imposition of new trade restrictions by US

Chairman Eric Xu told reporters, “The Chinese government will not just stand by and watch Huawei be slaughtered on the chopping board,”.

On the other hand, the United States accuses the Chinese government that they could use Huawei’s equipment for espionage. This serious accusation is rejected by the company.

The US placed Huawei on a blacklist in May 2019, citing national security concerns, restricting sales of US-made goods including chips to the company. American President Donald Trump’s administration is also making further restrictions that will seek to curb the supply of chips to the company, according to a report by Reuters.

A source provided information that rule-change is focused at restricting sales of chips to Huawei by Taiwan Semiconductor Manufacturing Co, which is the world’s largest contract chipmaker and a major inventor of chips for Huawei’s HiSilicon division.

Huawei’s Xu further told that even if the situation which I mentioned happens, Huawei and other Chinese companies can prefer to buy chipsets from Samsung of South Korea, MTK from Taiwan, and [Unisoc] in China. He implied that there is always an alternative.

However, Xu predicted that 2020 would be the toughest year for the company because of the US restrictions and warned that further export restrictions could have devastating affects on global tech supply chains.