Huawei's downfall started back in 2019 when the Trump administration sees the company as a threat to American national security and put it under a ban. The company was placed on an Entity list banning it from doing any business with US companies.
With the recent change of the Government in America, everyone saw it as a glimpse of hope, especially for Chinese smartphone maker Huawei. But Joe Biden's administration didn't prove to be as gentle as expected. Now that President has picked Gina Raimondo as a Commerce Secretary, she said, that she sees no reason why Huawei and other Chinese companies shouldn't remain under the trade sanctions.
She further added, "I understand that parties are placed on the Entity List and the Military End-User List generally because they pose a risk to US national security or foreign policy interests. I currently have no reason to believe that entities on those lists should not be there. If confirmed, I look forward to a briefing on these entities and others of concern".
Chinese Government sees the whole agenda as oppression and an attempt to stop Chinese companies from leading the industry. Chinese Foreign Ministry spokesman reacted to President Biden's administration's stance, and said, "We urge you to stop this wanton oppression against Chinese companies". Meanwhile, Huawei is witnessing a significant drop in its global smartphone market share.
The company has already lost its position in the list of top 5 smartphone vendor list, with an almost 35% drop in shipments for the fourth quarter of the last year. With these statements from the US officials, it looks unlikely that Huawei will get any relief from the US administration anytime soon.
Huawei meantime is developing its own operating system to replace Android and Google Mobile Services. However, the majority of users believe that it might not be enough. We have to wait and see what the future holds for Huawei and other Chinese companies.
Yesterday US President Donald Trump made an announcement that comes as a great surprise to Huawei users. At the ongoing G20 summit Trump said that "U.S. companies can sell their equipment to Huawei." This is a major relief to Huawei, which was suffering from the political tension between the USA and China. He further added, "We are talking about equipment where there's no great national security problem with it. I said that's O.K., that we will keep selling that product, these are American companies that make these products. That's very complex, by the way. I've agreed to allow them to continue to sell that product so that American companies will continue."
Somehow the President of the USA and China agreed to continue the trade between the two countries. As negotiations are expected to resume on this matter, Trump says he will allow Huawei to do business with US-based companies. The relief isn't going to remove the ban on the Huawei immediately but hopefully, both parties will conduct conversations on how to remove the company's presence on the entity list soon. Mr. Trump didn't get into any particular details regarding the scope of relief, so we have to wait for the further announcement.
Nonetheless, this news comes as a major relief for the company and its stakeholders. After Trump banned the company from buying and using any services or products from US-based companies including Google, Qualcomm, and many other suspended business with Huawei. It was granted a temporary general license for a few months to prepare for the permanent ban. Because of this ban, the future of the Chinese company was in the dark. The company's sale dropped as much as 40 percent as a result of the ban. With this relief, we can expect Huawei to resume the usual operation.