Manufacturing Giant Huawei Feeling Pressure from U.S vs China Trade Negotiations

Chinese device manufacturing giant, Huawei along with a list tallying over 130 U.S companies are feeling the frustration as a trade war rumbles on. President Trump is yet to firm up the details of potential U.S and China import tariff hikes and trading bans. This delay is leaving many in the smartphone and technology space at a loss following promises there would be resolution back in June.

Many U.S businesses are holding fire on licensing applications to sell to Huawei for various products and parts given the unknown details, sanctions and fall outs surrounding proposed trade tariffs. There are also concerns for technology makers and app developers stemming from allegations that Huawei technology can ‘spy’ on its users. The pressure from Trump comes after the Chinese government also adjusted trade tariffs across $75billion worth of international trade between the nations last year. It has most recently launched an official complaint with the World Trade Organisation against the US sactions.

Huawei is now the world’s largest telecoms manufacturer. If that wasn’t impressive enough, they are also the second largest smartphone device manufacturer on the planet. Undoubtedly and firmly placing them as one of the biggest powerhouse brands for the telecoms and tech industry in recent years. The brand now falls onto a trading list which effectively bans US companies from trading with them unless special licenses are obtained - which of course must be vigorously applied for.

The Trump administration has even gone as far as to detain Huawei's CFO, Meng Wanzhou since December on U.S. bank fraud charges. The Feds have suggested he was involved in misleading banks regarding the company's business with Iran. All very serious allegations.

The ongoing trade war has been suggested to be coming to a close by President Trump and he has many times acknowledged that it is overall damaging for the two largest global economies to be at odds. Not to mention stunting their growth. However, there have been plenty of bumps in the road so no firm date for a resumption of talks has yet been set.

Huawei announced strong growth for the first half of 2019 despite these troubles. This growth is predominantly driven by smartphone sales. Headline revenue was up 23% to top $58billion (400 billion yuan). Smartphone shipments were also up 24% to 118 million units. The company have released statements recognising that despite their impressive growth, they have high hopes the U.S trade blacklisting will be lifted in the very near future and that it was indeed a hinderance and a concern.

Certainly a hot topic at the moment and one to keep an eye on as you hit the ground running with our mobile app business opportunity.