Huawei On The Naughty Step

Posted: August 14th, 2019

It looks likely that Huawei, everyone’s current favourite bad guy is planning to make a substantial number of people redundant in the United States in the next few weeks.

Huawei, the huge Chinese telecoms and networking manufacturer has been under pressure from the Trump administration which has no started to feel the pinch and has announced that it will be making redundancies at it’s US R&D subsidiary called Futurewei Technologies who employs over 800 people.

The redundancies will affect many hundreds of people working in R&D in Texas, Washington and California.

Huawei, the Chinese manufacturer targeted by a Trump administration trade ban, is expected to dismiss a substantial number of people in the US in the coming weeks.

When Huawei was asked to comment on the pending redundancies Huawai dismissed the requests and declined to substantiate the claims.

Huawei is not alone in having to face the wrath of Trump and it’s foreign trade policies. Huawei are on of nearly one hundred similar firms which has been placed on the US Commerce Department’s Entity List. This does not permit any U.S company from conducting business with firms on the Entity list without having special permissions from the US government.

The Trump administration granted Huawei time for them to allow their customers to setup agreements with other suppliers prior to the Entity list restrictions coming into effect on the 19th of August. This is likely to happen unless the Chinese and U.S governments can reach an agreement.

This all comes from the belief that the US government have that despite Huawei’s claims of independence from the Chinese government that Huawei is heavily influenced to allow access to it’s networking equipment for the purposes of spying on its own citizens and foreign countries too. Although it has been rumour that this has been going on for a while there is no evidence that this is the case.

Some technology experts have often been critical of Huaweis poor system security in comparison to more mature and stable systems produced in the west like Cisco or Juniper.

There have always been rumour of networking equipment from all manufacturers having installed backdoors to allow government agencies to have access to traffic at will. These rumours have never been verified or confirmed and Huawei claim that they have never been requested by their government to install backdoors into their systems.

The redundancies seem to be in line with the fall in profits reported by Huawei. The Founder and CEO of Huawei Ren Zhengfei forecasted that the networking and telecom giant will turnover $100 in 2019 and 2020, which is a third less than they had previously predicted

Although the blacklisting has effected Huawei revenue there were some glimmers of hope when President Trump hinted that some I.T and telecom exports to Huawei could be restarted by did not give any indication as to when that would be and that any resumption of exports will only be on the basis that they do not present a threat to US national security.

How the threats are determined was not made clear. The whole idea seems to be an excuse to keep Huawei and its affiliates locked out of the lucrative US markets where their products are competing against the likes of U.S giant Cisco and other. For the time being Huawei is on the naughty step and time is running out for it in the U.S.

Commerce Secretary Wilbur Ross said the DoC “will issue licenses where there is no threat to US national security.” and “Huawei itself remains on the Entity List, and the announcement does not change the scope of items requiring licenses from the Commerce Department, nor the presumption of denial.”

Reuters, have said that US firms may be allowed to recommence doing business with Huawei shorty ever since President Trump and the Chinese president Xi Jinping meet last month