situation report

May 20, 2019 | 16:12 GMT

1 min read

China: Western Tech Companies Begin Reducing Business Ties With Huawei After U.S. Blacklisting

What Happened: Western technology companies, such as Google, Intel and Qualcomm have begun substantially reducing their business ties with Huawei after a U.S. Commerce Department decision to place the Chinese company on a blacklist that requires U.S. companies to obtain a specific export license to sell goods to Huawei, Reuters reported May 19.

Why It Matters: Although a Huawei subsidiary said last week the company was prepared to compensate for potential losses caused by Washington's blacklisting, the decision by various Western companies to downgrade business ties could significantly threaten Huawei's economic interests.

Background: U.S. President Donald Trump signed an executive order on May 15 to effectively block Huawei from selling equipment to U.S. telecommunications companies. On the same day, the U.S. Commerce Department placed the company on the Bureau of Industry and Security's Entity List, which forces U.S. companies to gain a specific export license to sell U.S. goods, services and technologies to Huawei.

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