The Justice Department could deliver a fatal blow to Huawei

The Justice Department could deliver a fatal blow to Huawei

Huawei is under investigation by the Justice Department for possibly violating export sanctions to Iran. With the Chinese company being faced with a criminal investigation in the US, it could mean a fatal blow is coming for the world's largest telecom company. And if the US bans Huawei, there would be negative consequences for everyone.

Just last week, the US banned ZTE, China's second biggest telecom company, from buying parts from US companies for 7 years due to export violations concerning Iran. Because of that move, ZTE has said that its survival and development are under threat and that the company's partners will also be negatively affected, including a large number of US firms. The government has now set its sights on Huawei for the same reason.

If Huawei gets the same treatment, it could result in the company being banned from purchasing any American technology. Given that Huawei relies on US technology for almost all of its telecom products, including smartphones, this could be a fatal blow to the company. Since Huawei also provides low cost enterprise network hardware, this could be a double whammy for US businesses selling to and buying from Huawei.

AndroidPIT huawei p20 pro 3202
Things are uncertain for fans of Huawei smartphones. / © NextPit

This year, US authorities have already accused Huawei of spying on behalf of the Chinese government, causing a deal to fall through such that Huawei won't be able to offer its smartphones through carriers in the US at present, to much consumer disappointment.

So it seems that the economic risk to US businesses and consumers of taking down Huawei must be smaller than the security risk posed by potential spying or violated export sanctions to Iran. Nevertheless, we cannot ignore that a ban would be a loss for US businesses and consumers who depend upon and enjoy Huawei products. 

What do you think of the current situation facing Huawei? Have the moves against Chinese companies trying to make their way in the US gone too far?

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  • Bruce Lee Apr 27, 2018 Link to comment

    What they can't buy, they'll steal. Heck, most of the technology the Chinese possess that allows them to make weapons and other high tech equipment are stolen from Western countries anyway. Huawei being banned by the US is no big deal. If China imposed the same ban to Apple, Apple stock would drop 50% on top of thousands of layoffs. China has tremendous leverage against other countries, namely, the 1.4 billion consumers!!

  • CJ Brown Apr 27, 2018 Link to comment

    It's nitpicking against another Chinese Firm!
    1st, start a Trade War
    2nd, enforce Tarriffs
    3rd, bully Foreign Manufacturers

    I'm not saying ZTE, or Huawei, isn't innocent - but I think this is a tad excessive to the point where it will have a negative impact on what consumers will be offered (and wait until the Feds go after Flatscreen TVs / Stereos Manufacturers)!

  • Rusty H. Apr 27, 2018 Link to comment

    Gotta protect the "big two" (Apple/Samsung) branded phones in the USA. People in the USA, for whatever reason, would rather buy a carrier branded phone, on payments, with a locked down, feature disabled phone, than buy them outright, using a MVNO and pay higher rates with a carrier I guess. "Oh, but it's no interest and I get a new phone for XXX", yeah but you think they do this out of the kindness of their hearts? Nope! They make it up sticking you with this fee and that fee and make a ton of money off of you. Hey, it's YOUR choice. Walk into a carrier store and you are greeted with Apple/Samsung. You think Apple & Samsung are going to let any other carrier into their duopoly in the USA? I'd bet dollar to doughnut, that there was a lot of money coming out of K-street lobbyist, flowing all over capital hill to get congress/FCC to knock Huawai, ZTE or anyone else down, to keep them OUT of the USA carrier branding duopoly they have now.

    • Chris D Apr 29, 2018 Link to comment

      Apple's iPhone is made in China.. this is all the work of the South Korean giant Samsung to move iPhone manufacturing from away from China.
      As it stands the screen production has already moved.

  • Ed Reames Apr 27, 2018 Link to comment

    This company had its start by copying a major networking company products twenty or so years ago.

  •   46
    Deactivated Account Apr 27, 2018 Link to comment

    The Chinese never have and never will play by the rules. They have launched all their phone manufactures off of stolen intellectual, and real property of other companies. They have been caught collecting data several times they do not stop they just hide it better.

    • Dwarfer66 Apr 27, 2018 Link to comment

      And the US is any better? All this seems to me is protecting Apple.

      •   46
        Deactivated Account Apr 27, 2018 Link to comment

        No I did not say that, I think big brother is everywhere and it is up to you take measures to at least limit the info they get. If you have a smart phone or computer they are getting information on you. Uploading your face to a data base is just a bad idea and millions are doing it.

      • miracle ofoma Apr 27, 2018 Link to comment

        You are right and that's the reason some people will still prefer Apple over Android. I'm not happy with the news but they can do more than that. Simple follow the legal process and watch your business boom... Still sad over the ZTE banned.

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