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Will Trump Make a Deal With Huawei?

Dan Jones

One intriguing possibility offered by the Trump administration lifeline deal for ZTE Thursday is whether it could float a similar deal for bigger Chinese vendor Huawei in the US.

Recall that Huawei Technologies Co. Ltd is also under investigation in the US for alledgely busting American sanctions by selling networking gear to Iran and North Korea. That's the exact same thing that ZTE got a seven-year domestic component sales ban for in April, forcing the company to shut up shop in May. (See US Govt. Bans Domestic Component Sales to ZTE and ZTE Ceases Business Operations After US Ban.)

Huawei has reportedly been under investigation since at least late April. (See US Investigating Huawei for Sanctions Violations – Report and Huawei, ZTE in the Eye of a Trade Storm.)

The Trump administration has just basically confirmed President Trump's deal for ZTE: The Chinese firm will pay an additional $1 billion in fines, and let a US-picked "compliance team" examine its top management team. (See ZTE Fined Another $1B in Rescue Deal With US.)

If Huawei got a similar components ban after the US sanctions investigation, Trump and team would surely hear from the Chinese government tout suite. Huawei is the third-largest smartphone vendor in the world, after Apple Inc. (Nasdaq: AAPL) and Samsung Corp. , much larger than ZTE. Ripples from any components ban would be swiftly felt across the tech world.

Of course, a $1 billion fine would merely be a slap on the wrists for Huawei. It generated sales of nearly $93 billion in 2017. (see Huawei Hits $92B in 2017 Sales.)

Could this happen? That seems to largely depend on the mercurial temperament of Presdent Trump. (See Trump Says ZTE Can Re-Open... With Conditions and Trump Admin Reboots $50B China Tech Tariffs.)

Meanwhile, don't forget that many bi-partisan senators are still hopping mad over Trump's ZTE moves. As Senator Marco Rubio tweeted on Thursday:

So it seems likely there's plenty more to come in the US-China tech stand-off. (See Congress Examines Google OS Deal With Huawei.)

— Dan Jones, Mobile Editor, Light Reading

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User Rank: Light Sabre
6/22/2018 | 8:48:08 AM
Re: Why...???
It will be interesting watch how Congress opposes or not Trump's proposals and whether there's enough tech wisdom in the halls of the legislature to understand all the issues that may fall under the umbrella of foreign tech firms and national security.
Clifton K Morris
Clifton K Morris,
User Rank: Lightning
6/11/2018 | 11:57:06 PM
I tend to believe that there are serious issues related to Huawei’s company structure. Dr.Lixun Son, former chief of wireless R&D at Huawei, left the company several years ago and started his own company, Baicells. Rumors are that when he left the role, he also left a large retirement package behind. When he started Baicells, he was able to also attract huawei’s top engineers too. Next, Huawei built a new office across the street from Baicells in China. So, these days it doesn’t seem like Huawei is an option. But Baicells is.... in fact at rural wireless ISP conferences in the US, rumor has it that Verizon’s wireless team was so impressed with the size and equipment capability that Verizon was “camping out” in the Baicells Booth. Now, with Hans Vesterberg, former Ericsson Guy, named to the top post at Verizon, you can somewhat see the power and capability of their platform. Baicells has 40+ ISPs in the US using Baicells Equipment, including billing, connectivity, and even SIM cards. Baicells doesn’t have the corporate issues Huawei does; its a separate company.
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