Huawei: US using technological strengths to ‘crush’ companies outside its own borders

Huawei has hit back at the US government following president Donald Trump’s decision to extend an executive order signed a year ago that effectively bans US companies from using telecommunications equipment made by firms posing a national security risk, in effect companies such as itself.

The Chinese tech giant has released a statement categorically opposing the amendments made by the US Department of Commerce to its foreign direct product rule that target Huawei specifically, slamming the decision as “arbitrary and pernicious”, and one that does not just affect Huawei, but which threatens to undermine the entire industry worldwide.

The US government added Huawei to its Entity List on 16 May 2019 and although not naming specific companies or territories, the initial ban aimed to “protect America from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services”.

On 22 November, US communications regulator the Federal Communications Commission (FCC) passed a resolution based on a proposal from its chairman, Ajit Pai, that fundamentally prohibits recipients of the regulator’s Universal Service Fund (USF) from using such money to buy equipment or services from companies that are perceived to be a risk to the US. Pai explicitly cited Huawei and ZTE in this regard, branding them “untrusted suppliers”.

The proposal also requires certain carriers receiving USF funds, known as eligible telecommunications carriers, to remove existing equipment and services from designated companies from their networks.

Huawei believes the original decision and the extension are without justification. It said that since May 2019 and despite what it described as a number of key industrial and technological elements that were made unavailable to the company, it has remained committed to complying with all US government rules and regulations.

It added that, at the same time, it has fulfilled its contractual obligations to customers and suppliers and that it has “forged ahead against all odds”.

Huawei has now released a statement condemning the US government as being in “relentless pursuit to tighten its stranglehold on our company”, adding that in proceeding with its extension, the US government has “completely ignored” the concerns of many companies and industry associations.

The company said: “This new rule will impact the expansion, maintenance and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries. It will also impact communications services for the more than three billion people who use Huawei products and services worldwide.

“To attack a leading company from another country, the US government has intentionally turned its back on the interests of Huawei’s customers and consumers. This goes against the US government’s claim that it is motivated by network security.

“This decision by the US government does not just affect Huawei. It will have a serious impact on a wide number of global industries. In the long run, this will damage the trust and collaboration within the global semiconductor industry which many industries depend on, increasing conflict and loss within these industries.”

Huawei accused the US of “leveraging its own technological strengths” to “crush” companies outside its own borders. This, it warned, would only serve to undermine the trust that international companies place in US technology and supply chains and, ultimately, would harm US interests.

Huawei also said it expected the ruling to affect its business. It said it hoped its customers and suppliers would continue to stand by the company and minimise the impact of what it called a “discriminatory” rule.

As Huawei was making the statement, in a keynote speech at the company’s 17th annual Global Analyst Summit in Shenzhen, Huawei rotating chairman Guo Ping said: “Over the past year, many technologies became unavailable to us. Despite this, Huawei struggled to survive and is striving to move forward. In the past 30-plus years, Huawei has deployed over 1,500 networks in more than 170 countries and regions, serving over three billion people worldwide.

“US actions against Huawei will not only harm Huawei, but also harm the experiences of customers and consumers that use Huawei's products and service. Today the world is an integrated collaborative system. The trend of globalisation should not and will not likely be reversed. Fragmented standards and supply chains benefit no one, and further fragmentation will have a severe impact on the entire industry.

“The industry as a whole should work together to strengthen IPR [intellectual property rights] protection, safeguard fair competition, protect unified global standards, and promote a collaborative global supply chain.”