US-based companies will be allowed to resume business with Chinese networking company Huawei, following an apparent reversal from US President Donald Trump, according to Business Insider.
The lifting of the Huawei ban in the US — handed down by the US Department of Commerce in May — was reportedly the result of ongoing discussions at the G20 summit in Japan, and a concession to Chinese president Xi Jinping to resume negotiations over US-China trade relations.
Here’s what it means: Companies in the US will once again be able to sell their products and access to services to Huawei.
This will allow Huawei to continue to conduct business with companies such as Google and Qualcomm, which are key partners that enable the Chinese company’s business in a number of ways. For example, Huawei may be able to continue to provide access to the Google Play Store and other Google services for its Android-based smartphones.
It will also be able to continue using hardware like Qualcomm’s Snapdragon mobile chipset to design and build those mobile devices, which means the capabilities of Huawei’s smartphones will remain in-line with other flagship devices.
The bigger picture: While Huawei will be able to resume sourcing its components and services from US-based companies, this shift from the US is unlikely to inspire US or European companies’ trust in Huawei — or inclusion in their networking plans.
A key reason why Huawei isn’t a major participant in the network infrastructure of the US mobile market is that security officials don’t trust that the company’s equipment is secure from Chinese espionage. This wariness has also spread beyond the US and through much of Europe in the last year, with countries like France, Germany, and the UK increasing scrutiny on Huawei networking components.
Reopening the US market for Huawei as a customer doesn’t address concerns from security officials about the company’s ability to supply trustworthy radios and networking equipment. That means it’s unlikely to reverse decisions like the UK’s determination that Huawei equipment shouldn’t be used for “core parts” of the country’s 5G infrastructure.
With likely limited opportunity in the US and in Europe’s networking upgrades, Huawei’s path forward as an enterprise supplier — especially outside of China — remains murky. This comes at perhaps the most inopportune time, as countries around the world gear up to spend tens of billions of dollars annually for the next few years to get 5G networks off the ground.
For instance, distrust toward Huawei in Europe could pave the way for Ericsson, Nokia, and other companies in the networking space to grab a larger share of 5G network infrastructure contracts in the coming years.