What Makes the Huawei U.S. Ban Harmful to Tech Firms

about 3 weeks ago by Luke James

Policy surrounding technology should be based on objective standards and research rather than haphazard decisions influenced by the geopolitical climate.

In May this year, U.S. President Donald Trump signed an Executive Order that banned U.S. companies from doing business with Huawei. Citing matters of national security, Trump's ban has led to several high-profile U.S. firms preparing to pull out of China and has left a dent in Huawei's operations.

That is the short-term situation. 

In the long-term, however, the ban could do more harm than good for U.S. firms and make the U.S. less of a dominant market as Chinese companies become more self-reliant and begin to develop more technologies at home. 

 

Does the Huawei Ban Set a Dangerous Precedent?

The heavy-handed and unprecedented move by the U.S. President could directly harm American organizations and, consequently, billions of consumers worldwide. 

Following the ban, Huawei's Chief Legal Officer and Chief Compliance Officer, Mr. Song Liuping, said, "This decision threatens to harm our customers in over 170 countries, including more than three billion consumers who use Huawei products and services around the world."

 

The flag of China. Image courtesy of Pixabay.

 

He added, "By preventing American companies from doing business with Huawei, the government will directly harm more than 1,200 US companies. This will affect tens of thousands of American jobs."

But of course, Huawei are going to say this as it is in their interests to—does the argument have any weight? 

 

Google Views Huawei as a Threat

Under the U.S.-China trade ban, Google is not allowed to do any dealings with Huawei, period. This means that they are not allowed to support Huawei's devices with Android updates and, as such, Huawei may now need to develop its own operating system, and some reports have indicated that Huawei already has.

On the face of it, this doesn't sound too problematic—what danger does a Huawei OS pose? 

There are several schools of thought on this. The primary one being that Huawei's OS would be a "forked" version of Android, ripped by Huawei out of necessity, and may leave the U.S. open to greater hacking risks, not just by China but others, too. 

This "forked" version of the Android OS would be lacking in several Google services and security features, one being Google Play Protect that scans for security threats such as malware and viruses, leaving Huawei's phones running this version of Android OS inherently vulnerable. 

While many may immediately think that this isn't problematic because Huawei phones are not available in the U.S., it is important to remember that the U.S. does not exist in its own bubble; it is an entirely plausible scenario for a government official to innocently send critical information to another official using a Huawei phone using the vulnerable "forked" Android OS. 

Although the above is a "what if" scenario and is not backed by evidence, the fact that these concerns have come directly from Google should carry some weight. 

P.s. Google's license to supply Huawei devices with security updates expires on August 19. 

Huawei is Too Big to Fail

It appears the Trump administration think that this blanket ban on Huawei products and U.S. firms trading with Huawei is the be-all and end-all solution. 

It is not.

Huawei is the world's largest telecommunications company and second-largest smartphone manufacturer, sitting behind Samsung and ahead of Apple. In 2Q18, the company shipped 54.2 million smartphones, up 15.7 million from their 2Q17 shipments. 

 

Huawei U.S. headquarters. Image courtesy of Huawei. 

 

The truth is that Huawei is not some small start-up that is fiscally vulnerable and will suffer heavily as a result of the Trump Administration's ban; when you consider the above figures with how loyal and intertwined Huawei is with the Chinese government, you have a company that is too big to fail even when under constant attacks from and are blacklisted by the U.S. Government.

 

Should the U.S. Be Worried About Huawei?

The U.S. and China have had strained relations for a long time and the current Huawei fiasco is only going to make things worse. China already considers the U.S. as a threat and sort-of "enemy" at peace—Trump's ban just pushes this risky dynamic closer to the tipping point.

When push comes to shove (no pun intended!) China will defend Huawei at all costs. The same cannot be said about the U.S. Government and U.S. firms such as Google and IBM. 

The Huawei ban is about one thing and one thing only, the U.S. Government vs China. This leaves U.S. firms in limbo in the middle, a very dangerous position indeed. Over time, the effects on this will be detrimental and long-lasting. 

 

Pot Kettle Black

While I can see why the U.S. moved to place their ban on Huawei—after all, the company is rather unscrupulous and has some pretty shady business practices—it is hard to ignore the hypocrisy of it. After all, it is not as if U.S. firms, Google included, have spotless histories. 

Then there is the whole "Huawei are spying on us!" argument which, given the NSA and the United States' history of spying, is laughable at best.

In fact, I would much rather China spy on my internet activity via a Huawei smartphone than the U.S., UK, and other "5-Eyes" nations because China would not share their (boring and uninteresting) findings with the Americans! 

At best, the ethical position of Huawei is questionable, as is Google's, and the U.S. Government's ban does make some sense but is it worth it? Are the potential ramifications worth this glorified act of one-upping on behalf of the U.S.? Likely not.

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