Huawei vs the US: the latest casualty of the trade war and its fallout
20.5.2019
Translation: Patrik Stainbrook
Video: Manuel Wenk
The White House’s decision has been made: American companies can no longer work with Huawei. That means Huawei can’t use Google services anymore, with immediate effect.
This means Huawei will immediately lose access to Google Services and privileged access to early builds of the Android operating system. Existing devices such as the Huawei P30 Pro won’t be affected. However, this may impact on future devices. But as the situation is still unfolding, it’s all a bit up in the air.
On Friday, it still wasn’t clear how much Huawei would be affected by the sanctions, as the US Commerce Department wanted to check if current networks and network equipment could be impacted. In fact, the extent to which Huawei would be affected was still unclear up until last Sunday.
In a nutshell:
20 May 2019: Google and Huawei give us confirmation
Google confirms the sanctions in a tweet from the official Android account.
This probably affects Honor devices as well given that the brand is a Huawei subsidiary.
Huawei confirmed this in an e-mail on the morning of 20 May 2019:
Huawei has made substantial contributions to the development and growth of Android around the world. As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefitted both users and the industry.
Huawei will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products.
This covers those that have been sold and that are still in stock globally. We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally.
The world of today: it’s not that crazy… or is it?
And so it could be the case that Huawei has to carry on without Google’s direct support. But neither the US administration, nor China, nor Google can stop Huawei working with Android. That’s because Android is inherently an open operating system. Anyone can customise it, even you.
But this hits Google Play services hard – in other words the whole app store and its integrations and APIs. They probably won’t feature any more on Huawei phones, apart from on existing ones. But if you buy the phone, you can always add Google services yourself.
Future vision 1: AOSP for Huawei
This basic version is called Android Open Source Project (AOSP).
If Huawei wants to keep working with Android and if the trade laws stay the same as those outlined on 20 May 2019, then Huawei will have to build using AOSP. In practical terms, that means in the context of the existing Emui version:
- Google Play Store has been removed but users can choose to add it.
- Google Security updates aren’t carried out automatically.
- Google Services have been removed but users can choose to add them.
- Google apps are no longer pre-installed but users can choose to add them.
- Updates will probably take longer to arrive.
According to Google, existing devices won’t be affected by these measures.
Future vision 2: Huawei OS as third player
Future vision 3: Huawei US
Given that a collaboration between Huawei and Google is only constricted by the fact Google is based in the US and Huawei is headquartered in China, Huawei could still launch a subsidiary in the US. This legal entity, theoretically «Huawei US», would then handle developer contracts with Google. In which case, in the eyes of the law, everything would be carried out on US soil.
On paper at least, this would go hand in hand with Donald Trump’s plans to create new positions in the US job market.
Context: the ZTE case
The backdrop of the trade war between the US and China draws parallels with the ZTE case. The Chinese smartphone maker was blacklisted in April 2018 and was forbidden from working with US companies. A month later, the company stopped trading. That was until July, when the ZTE name was removed from the blacklist.
According to the South China Morning Post, ZTE recorded losses of 1.1 billion US dollars in the first half of 2018. Meanwhile, in the first half of 2019, it expects profits in the region of 260 million US dollars.
The US trade war at a glance: the feud with Trump
The sanctions against Huawei are born out of the long-running trade war, which the US is leading against China under president Donald Trump. Experts aren’t agreed on how sensible, sustainable or damaging this war is. The Trump administration already has experience in sabre-rattling when it comes to China, and in fact, even as recently as three years ago.
28 June 2016: «The biggest job theft in history»
During his campaign for presidency, Donald Trump announces at an appearance in Pennsylvania that he has plans to take action against unfair Chinese trade practices. He announces tariffs, which are later imposed on the Chinese.
Trump labels the Chinese practices the «biggest job theft in history».
31 March 2017: Trump signs
Trump, who has since become president of the United States, signs two executive orders, which are designed to levy more customs duty on Chinese firms. Subsidised trade and anti-dumping trade are particularly affected.
The second executive order demands an enquiry into the US trade deficit.
7 April 2017: Donald Trump meets Xi Jinping
In a meeting at Trump’s Mar-a-Lago resort in Florida, the US president and Chinese president Xi Jinping agree to a 100-day phase of talks on trade between the two countries.
19 July 2017: disenchantment
The talks fail.
The aim was for both nations to find a way to reduce American debts to the Chinese and reduce new debts.
14 August 2017: Section 301
17 January 2018: fines
Trump announces in an interview with news agency Reuters that he is imposing a fine on China. This comes off the back of allegations of stealing intellectual property. However, Trump can’t give any proof, details or concrete evidence in the interview.
«It’s not only China. China’s just the biggest. It’s everybody,» Trump says in the interview.
22 January 2018: tariffs added to washing machines
The Trump administration imposes tariffs on imported washing machines and solar panels. This doesn’t just affect washing machines and solar panels from China but all imported washing machines and solar panels.
8 March 2018: aluminium and steel get more expensive
The Trump administration introduces more tariffs. Imported steel is hit with a 25% tariff and aluminium with 10%. As with washing machines and solar panels, these tariffs on imported steel and aluminium apply to imports from all countries, not just those from China.
2 April 2018: China hits back
China imposes tariffs of up to 25% on 128 American products.
3 April 2018: the conflict hots up
The USA introduces tariffs of 25% on goods valued over 50 billion US dollars.
4 April 2018: it’s China’s turn
China introduces tariffs on US goods valued over 50 billion US dollars.
16 April 2018: ZTE is affected
The Chinese telecoms company ZTE is put on the same blacklist that Huawei has just found itself on. The South China Morning Post reports this is because ZTE admitted to selling technology to Iran. And according to the US, this constitutes an offence to trade under Section 301.
27 April 2018: Huawei caught off guard
The South China Morning Post announces that Huawei has been working on a mobile operating system for six years and that it could replace Android should it be necessary.
ZTE is all doom and gloom
Bloomberg reports that ZTE, a company with 80,000 employees, has ceased trading. All outstanding orders are being settled but then what happens after that, no one knows.
15 June 2018: a deadline looms on the horizon
The US sets an implementation date for the customs regulation. From 6 July, 25% tariff increases will apply on goods valued at 34 billion US dollars. Customs duty will also apply on heavy goods valued at 16 billion dollars.
In turn, China introduces tariffs on goods from the US valued at 34 billion US dollars.
10 July 2018: even more tariffs
The US announces plans to levy customs duty of 10% on Chinese goods valued at 200 billion dollars.
13 July 2018: ZTE can trade with the US again
The Verge reports that ZTE has been removed from the blacklist.
1 August 2018: Trump intervenes
Donald Trump instructs the 10% tariff on Chinese goods valued at 200 billion dollars that was announced on 10 July be increased to 25%.
7 August 2018: here we go again
A pattern is emerging. The US publishes a list of Chinese products valued at 16 billion US dollars that have a 25% tariff slapped on them.
China levies tariffs on US products that are valued at 16 billion US dollars.
23 August 2018: tariff regulations come into force
Tariff regulations that are outlined in the lists from 7 August come into force.
7 September 2018: new threats
President Trump threatens to introduce further tariffs on goods valued over 267 billion US dollars.
24 September 2018: and so it continues
The US agrees on a 10% tariff on Chinese goods valued at 200 billion US dollars. The government announces the tariffs will increase to 25% on 1 January 2019.
China retaliates with tariffs on goods valued at 60 billion US dollars.
1 December 2018: the US and China enter talks
The US and China agree to a 90-day trade tariff ceasefire. Trump then agrees not to increase the tariffs that he implemented on 1 January before March 2019. Up until then, China and the US want to hold talks. At which point China agrees to buy «a significant amount» of goods from the US.
24 February 2019: Trump doesn’t keep his word
Trump decides not to increase the tariffs on 1 March 2019. But the threat to increase them remains even though no implementation date is given.
5 May 2019: Trump ups the ante
Trump announces that the customs duty on goods valued at 200 billion US dollars will increase from 10% to 25% on 10 May 2019.
8 May 2019: the threat becomes official
The Trump administration officially announces that customs duty on goods valued at 200 billion US dollars is increasing from 10% to 25% on 10 May 2019. Reuters reports that China no longer considers most of the assurances that emerged from talks with the US as binding.
16 May 2019: second attack against Huawei
Trump’s government blacklists Huawei. The Chinese company isn’t allowed to trade with US companies with immediate effect.
17 May 2019: there’s hope for Huawei
The US Commerce Department checks to see if the latest sanctions against Huawei would disrupt existing networks or infrastructure.
19 May 2019: Huawei without Android
Google can no longer work with Huawei. The latter still has the option to use the free version of Android AOSP and build other Android versions with its own user interface, Emui, as well as other proprietary features.
Journalist. Author. Hacker. A storyteller searching for boundaries, secrets and taboos – putting the world to paper. Not because I can but because I can’t not.
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