The US Commerce Department has proposed rules and policies to stop China and other foreign nations of concern from benefitting from the $52 billion fund of the US Semiconductor Manufacturing and Research program. The proposed rules will affect countries like China, Russia, North Korea, and Iran. 

Companies that receive grants under the federal semiconductor fund will not be allowed to invest or expand their semiconductor business in countries like China and Russia. Moreover, they will also not be allowed to engage in joint research or share technology related to semiconductors with these nations. For the next 10 years, the companies who receive the grant will be barred from building or expanding semiconductor manufacturing factories in countries that come under the list of foreign entities of concern. 

The US Commerce Department has also classified the chips according to their importance and designated some advanced chips including the quantum chips and military use chips as ‘critical to national security’. These chips will be subject to tighter restrictions as they play a critical role in the technological advancement of the country.

Commerce Secretary Gina Raimondo said that the tighter restrictions cover chips used in current-generation, mature-node chips used for quantum computing, chips used in radiation-intensive environments, and other specialized military capabilities. She further added that these restrictions would help to ensure that the US stays ahead of its adversaries in the coming decades.

What is the US Semiconductor Manufacturing and Research Fund?

The US Semiconductor Manufacturing and Research Program is a specially designed fund under the CHIPS and Science Act of 2022. The Biden administration created the $52 billion fund to encourage the domestic manufacture of semiconductor chips, as well as continued research in the field. 

On Tuesday the Commerce Department released the proposed rules and regulations for the use of these funds. From late June, the department plans to start accepting applications for a $39 billion manufacturing subsidy program. The law also creates a 25% investment tax credit for building chip plants estimated to be worth $24 billion. 

The application will be a five-step process where companies will have to submit a workforce plan that includes an outline of workforce needs. Companies that are accepted and receive more than $150 million in direct funding will have to comply with additional rules and regulations. These companies for instance will be required to share with the US government a portion of any cash flows or returns that exceed the applicant’s projections by an agreed-upon threshold. 

The companies will get somewhere around 5% to 15% of project capital expenditure as direct funds and the total amount of an award including a loan or loan guarantee, will not exceed 35% of project capital expenditures. All recipients of the fund will be required to sign an exclusive agreement accepting restrictions on the expansion of semiconductor manufacturing capacity in foreign countries of concern like China for 10 years after winning the funding. 

Related:

• China Sees Sharp Fall in Semiconductor Imports: US Sanctions Taking a Toll on the Industry
• China Said to Use Whole Nation Approach to become Self Reliant in Semiconductors and Combat US
• China creates its first refrigerator for quantum chips

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US Commerce Department and other regulatory authorities approved around 70% of licenses for export to China in 2022. This is despite the ongoing US-China tech war and the extreme sanctions on semiconductor export to China. 

Alan Estevez, the Under Secretary of Commerce for Industry and Security said that in 2022 the US government approved around 69.9% of export applications involving China. This means only 30.1% of applications were rejected or returned without action. 

He further added that even though the approval rate is high, there are no loopholes when it comes to approvals for China.  The average processing time for approvals was 40 days but for applications related to China, the average time for approval was 77 days or more. 

According to Reuters, Eztevez who is going to attend the US Foreign Affairs Committee hearing on “Combating the Generational Challenge of CCP Aggression”, is going to present his case and reassure the government that China remains the main focus of the enforcement bureau and he and his team will continue to work towards this goal in 2023. The Combating the Generational Challenge of CCP Aggression hearing is happening today before the House of Representatives at the US Capitol Building. 

US-China Trade War:

The US-China trade war started in 2018 when then-president Donald Trump imposed sanctions and tariffs on exports to China in order to stop alleged unfair trade practices and intellectual property thefts. China plans to become the global leader in artificial intelligence, military weapons system, and quantum computing and the US wants to limit this progress in order to safeguard its economic and military interests. The current Biden administration also continues to impose sanctions and restrictions on exports to China, to control and crush the Asian economy. 

The US has already added Chinese tech giants Huawei and ZTE to the infamous entity list.  The list has more than 639 Chinese or China-related businesses and individuals on the trade blacklist. Companies on the entity list are banned from receiving  US-origin goods, services, and technology. 

The US has mainly banned the export of semiconductor machinery, technology, personnel, and technical know-how to China, which is the largest consumer of semiconductors in the world. The Biden administration also successfully roped in allies like the Netherlands, Japan, and South Korea to impose restrictions on their semiconductor exports to China. 

Eztevez justified these restrictions by saying that the sanctions were imposed to address concerns related to the production of advanced semiconductors. He further added that these controls are not intended to stop the production of legacy semiconductors, and are neither tools of economic protectionism instead they are national security and foreign policy tools. 

US-China Record Trade Despite Ongoing Sanctions:

Despite the ongoing trade war, US and China set a record high trade figure in 2022.  The total import and export increased by 2.5% YoY reaching a whopping $690 billion. The previous record was set in 2018 for $658.8 billion. 

The US trade deficit with China also increased to $382.9 billion reaching 8.3% YoY. In 2022, China was the third largest trading partner of the US after Canada and Mexico and the largest source of imports for the country. On the other hand for China, the US was the largest single-country trade partner and the third largest trading partner after ASEAN and EU. 

The record trade figures show that the US and Chinese economies, heavily rely on each other and despite the ongoing tech war and diplomatic stand-offs decoupling both economies does not seem viable.

• US May Set a Cap on South Korean Semiconductors Made in China
• ASML CEO says that attempting to restrict chip shipments to China will fail
• US Export Controls Could Cause Long-Term Harm to Global Semiconductor Industry: CSIA Warns
• MWC 2023: Best Products & Announcements From Day 1

(via)

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UPDATE:

WSJ confirmed that the Phase One deal has been finalized! It covers Agriculture, Intellectual Property Protection, Tech Transfer, Financial Opening and Currency.

After several rounds of tariffs on Chinese and U.S. made products in their respective markets, China and the U.S. have finally come very close to a mini trade deal. This news should come as a relief to companies based in both the markets as it will reduce as well as eliminate the new set of tariffs expected to be imposed on goods from China starting December 15. 

The U.S. President Trump tweeted yesterday night that the U.S. was getting “VERY close to a BIG DEAL with China”. The exact details of the deal are not yet official, but the U.S. has reportedly agreed to scale back some of its existing tariffs on Chinese goods. The deal would also remove the next round of tariffs that would have hit another $150 billion worth of Chinese goods from December 15. In return, China will pledge in writing to purchase $50 billion worth of U.S. agricultural goods, among other items in 2020. 

Editor’s Pick: German carrier picks Huawei to build its 5G network

The upcoming round of U.S. tariffs on Chinese goods starting December 15 would have been damaging to both the countries. It included essential consumer goods such as smartphones, gaming consoles, computer monitors, and even clothing and footwear. On the same day, China would have imposed its own set of tariffs on American made goods such as automobiles, auto parts, corn, wheat, small aircrafts, among other items. 

While this Phase I trade pact is almost official from the U.S. side, we are yet to hear an official announcement from the Chinese authorities. We won’t have to wait too long though, as an official statement or an absence of one before December 15 would confirm the status of the deal.

Note that this phase one trade deal is unlikely to decide Huawei‘s fate who’s currently on the U.S. entity list. This deal is more focused on working out an amicable agreement before the next round on hefty tariffs that’ll come into effect this Sunday, which will be damaging for both the markets. 

UP NEXT: Apple iPhone sales plummet by 35% in China

(Source)

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Huawei has sued the U.S. government over the recent FCC restrictions that further curbs what little business the company has left in the U.S. The lawsuit challenges a decision taken by the FCC that prohibits rural carriers in the country from using federal subsidies to purchase Huawei equipment.

This is the second such lawsuit from Huawei in the U.S. after it first challenged the ban on the sale of its products to federal agencies back in March. The latest lawsuit was filed in New Orleans against the FCC after it branded the company as a ‘national security threat’ and restricted the sale of Huawei equipment to rural U.S. carriers by blocking access to the Universal Service Fund (USF) for purchases from both Huawei and ZTE.

Huawei’s business with rural U.S. carriers is minimal in comparison to its massive 105 billion revenue posted in 2018. However, it says that such decisions create a stigma around the company which will affect its ability to grow its business globally. Branding a multinational company like Huawei as a national security threat would indeed affect its reputation around the world.

For example, prime minister Boris Johnson recently said that the UK could block Huawei from investing in its 5G networks. Even Japanese carriers have excluded Huawei from 5G deployment. But the company has already signed 50 5G contracts with carriers around the world. So, it’s very important that Huawei protects its reputation on a global scale.

Editor’s Pick: Qualcomm CEO says cooperation with Huawei is needed for 5G development

Huawei argues that the U.S. ban doesn’t provide any proof to support its claims of “backdoor access” or “national security threat”. Also, given how competitors like Nokia and Ericsson make a lot of their telecommunications equipment in China, the claim of China-made gear threatening U.S. security also applies to Huawei’s competitors.

“Both FCC chairman Ajit Pai and other FCC commissioners failed to present any evidence to prove their claim that Huawei constitutes a security threat, and ignored the facts and objections raised by Huawei and rural carriers after the FCC first made the proposal in March 2018,” said Huawei’s Chief Legal Officer Song Liuping at a press conference in Shenzhen that was live-streamed.

This lawsuit comes at a time when some companies like Microsoft were granted a special license to trade with Huawei. It remains to be seen whether this move from Huawei will have any effect on future license approvals from the U.S. commerce department.

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A couple of days back, we reported that Huawei’s CEO Richard Yu believed Huawei could have been the world’s largest smartphone marker, surpassing Samsung in 2019, if not for the U.S. ban. But that doesn’t rule out the possibility of Huawei becoming world’s no.1 even with the ban in place.

Huawei’s CEO and founder, Ren Zhengfei said in an interview with CNN that Huawei can become the world’s no.1 smartphone maker even without Google. When asked whether the company had a backup plan, Ren said that Huawei is working on a large scale solution to tackle this situation. He was likely referring to the company’s own HarmonyOS platform that was announced back in August in China.

He also said that he doesn’t know whether Google was ‘definitively ‘denied a license to trade with Huawei. This response comes at a time when some companies have been granted a license to trade with the telecommunications giant. For example, Microsoft recently got a license to export software to Huawei by the U.S. commerce department. Thanks to the trade license, Microsoft could supply Windows 10 to Huawei’s new MateBook D notebooks in China.

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However, the real question in our minds is whether Google will ever receive a license to trade with Huawei. It’s been six months since the U.S. ban came into effect and newly launched Huawei smartphones do not feature Google apps which have become more or less essential for international users. And without Google, Huawei smartphones are basically dead on arrival in the international markets.

But today’s comment reveals that Ren is pretty optimistic about Huawei’s comeback. He added in the interview that it was a matter of waiting for some time until Huawei got back into the international markets. According to Ren, Huawei will make a comeback in the next two years.

“We will have to resort to alternatives. If those alternatives become mature, I think it’ll become less likely to switch back to previous versions,” added Ren at the interview “It is a critical moment for all of us, I hope the US government can consider what’s best for American companies.”

While we still don’t know what Huawei is planning for the international markets without Google, it’s current strategy has been to double down its efforts in China. And thanks to the sales boosts in its home market, the company is doing better than most other smartphone companies on a global scale.

UP NEXT: Smartphone sales decline in Q3 2019, but Huawei sees 26% growth

(Source)

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The Trump administration is reportedly considering to exempt Apple from the upcoming round of China tariffs on iPhones, iPads, and MacBooks reports WSJ. While this would ensure Apple devices stay competitive, Samsung’s current manufacturing situation could have a greater role to play in this decision.

Most of Apple’s manufacturing is based in China. So a tariff on imports from China will adversely affect the Cupertino giant’s sales in the country. And with iPhones and Macbooks becoming costlier, other brands like Samsung would get an unfair advantage. That’s because Samsung has shifted most of its smartphone and device manufacturing outside of China, in huge factories based in countries like Vietnam and India. So if Apple was to bear the brunt of the recent China tariffs, iPhones would get a lot more expensive as compared to Samsung’s flagship Galaxy series in the U.S.

“The problem we have is you have Samsung, it’s a great company, but it’s a competitor of Apple. And it’s not fair because we have a trade deal, we made a great trade deal with South Korea. But we have to treat Apple in a somewhat similar basis as we treat Samsung,” Trump was quoted as saying by WSJ.

Trump made this statement during his visit to the new $1 billion, 133-acre campus in Austin, Texas that’s being constructed beside the already-functional Mac Pro production facility. The campus will house 5,000 employees when it opens in 2022, which can be further scaled to accommodate 15,000 employees in the future.

UP NEXT: Samsung and Google Camera apps vulnerable to hijacking, fix is on the way

(Source, Via)

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As expected, the U.S. government has extended Huawei’s temporary export license for another 90 days. This will be the third 90-day temporary extension granted to the Chinese telecommunications giant, ever since it was placed under the U.S. Entity list which barred U.S. companies from trading with Huawei.

Huawei’s last 90-day extension expired yesterday, so this announcement was timely. According to the Trump administration, the extension is granted to support the existing infrastructure built by Huawei in the U.S. For example, a number of rural carriers in the country are dependent on Huawei and ZTE’s telecommunications equipment. Replacing them immediately isn’t an option given that it could cost them nearly billions to suddenly shift to another equipment maker.

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“The Temporary General License extension will allow carriers to continue to service customers in some of the most remote areas of the United States who would otherwise be left in the dark,” said the U.S. Secretary of Commerce Wilbur Ross. “The Department will continue to rigorously monitor sensitive technology exports to ensure that our innovations are not harnessed by those who would threaten our national security.”

This 90-day reprieve also allows Google to support Huawei’s existing Android-based smartphones. However, this extension does not apply to new models, so smartphones like the Mate 30 Pro won’t still be able to run Google applications.

While Huawei’s international smartphone strategy is currently in a shambles, the company seems to be working hard with its HarmonyOS to find a workaround for Google Apps. Recently, Huawei’s Ling Hua revealed in an interview with CNBC that the company would announce its HarmonyOS strategy on November 20. He didn’t reveal what kind of strategy he was referring to but it could be anything from bringing HarmonyOS to smartphones to doubling down the focus on IoT products. You can read more about what he said about HarmonyOS and its future from this article.

UP NEXT: Huawei Mate X being resold at up to 60,000 yuan via third party websites due to lack of supply

(Source)

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It’s been nearly eight months since Huawei was added to the U.S. government’s blacklist, officially known as Entity List. While Huawei has managed to limit the repercussions of the ban so far, it is looking at a tough road ahead. In fact, Huawei executives have admitted that U.S. sanctions are hurting them.

According to the Financial Times, Huawei is finding it hard to replace Google’s applications on its smartphones. Over the past few months, the company has managed to replace most of the equipment from the U.S., but they haven’t found a viable solution to Google services. And they admit that it’ll be years before they can come up with their own alternatives.

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Software remains the biggest headaches for Huawei. Apart from Google applications, Huawei also cannot use Microsoft’s Windows 10 platform that powers its MateBook lineups. In this regard, it recently started selling Linux variants of its laptops on its official store in China. Notably, Huawei’s existing smartphones are allowed to use Google services under the recently granted extension. However, new models such as the Mate 30 Pro cannot officially install and run Google applications. There are workarounds to run Google services on these devices, but its future is uncertain.

Unfortunately, even after eight months since the official ban began, there hasn’t been a resolution between the company and the U.S. government. A lot is riding on the trade talks between China and the U.S., and Huawei’s future as a top smartphone maker depends on how these talks culminate.

It’s not all bad though as there are reports which state that U.S. companies could soon get the green-light to sell to Huawei and Google could be one of them.

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(Source)

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While the U.S has been accusing Huawei of installing backdoors on its networking equipment that can be used to steal sensitive user data, this time Huawei is reportedly moving its senior executives and scientists linked to the U.S. to its subsidiaries over concerns that they could be secretly contacted by American agents who might force them to reveal sensitive company information.

In simpler words, Huawei is said to believe that the American administration could infiltrate the former’s task force hailing from the US posing a great threat to the company’s classified data that includes its future roadmaps. Until now, several Huawei executives with senior research and development positions, including Asian-Americans, have left the company or been moved claimed Nikkei’s sources.

A couple of such Huawei officials include Sunhom Steve Paak and Wang Hsin-shih. The former has reportedly been moved to HiSilicon Technologies to serve as the chief technology officer. On the other hand, the latter has made an abrupt exit from the company. While the sources questioned the two employees and Huawei, they either did not reply or decided not to make any comments on this report.

As of now, the Chinese corporation has laid off 70% of its employees at one of its U.S. subsidiary, Futurewei due to the fact that it can no longer maintain trade relations with any other American companies.

We can find mathematicians in Russia, scientists from Europe … if we can’t from the U.S.

Moreover, senior Huawei executives had previously declared that they want to recruit “young geniuses” from around the world. They have also boasted the new hires at Huawei with doctorates are offered an annual salary of up to 2 million yuan ($281,000) which is higher than Google or Apple.

While the U.S ban has drastically affected the sales of Huawei’s offerings which includes smartphones and telecommunication equipment, the company posted surprising results earlier today which exhibit 24 percent growth in the first three quarters of 2019 to 611 billion yuan (US$86 billion).

To wrap things up, this is a tricky situation for Huawei but it seems to be handling it well with strong support from the Chinese government. For now, we can only wait and watch what the future holds for the company.

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(source)

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This week, U.S. and China officials are meeting to discuss the ongoing trade war. But two U.S. companies aren’t waiting around to see if these two superpowers make amends. Fitbit, as well as Tile (maker of the Bluetooth-enabled location tracker), have confirmed that they will be moving their manufacturing units out of China.

By January 2020, all of Fitbit’s manufacturing operations will be outside of China. The main reason for this shift is to avoid the heavy tariffs being subjected to the goods originating from China. This announcement comes well before the next round of tariffs that goes live from December 15 affecting an additional $300 billion worth of Chinese imports.

Duties on gadgets like smartwatches and Bluetooth trackers with low margins will seriously affect their competitiveness in the U.S. market. And considering how the relationship between the U.S. and China has been deteriorating recently, it makes sense why these companies would want to mitigate their risks.

Fitbit recently unveiled the Versa 2 smartwatch in the U.S. featuring an OLED display, NFC, Spotify, and Alexa for $199.

UP NEXT: U.S. Companies could soon get the green-light to sell to Huawei

(Source)

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As the US-China trade talks resume, Huawei reportedly has a ray of hope. According to the latest report, the Trump administration is ready to approve some licenses that allow U.S. companies to sell goods and services to Huawei. This should come as a respite to the Chinese telecommunications giant whose products like the Huawei Mate 30 Pro haven’t had a proper international release.

NYTimes reports that these approved licenses will allow a ‘select few American companies’ to resume selling their products to Huawei. It is worth adding that back in August, the U.S. government had received over 130 license requests for the same. But it’s possible only a select few of these requests will be approved.

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Without Google apps, the Huawei Mate 30 series is practically DOA in the international market. So the company needs to get Google back on board. Also, its position in the global smartphone market is at risk, with Apple predicted to overtake Huawei by the end of this year. Even Samsung’s smartphone department posted better than expected results last quarter, at Huawei’s expense.

However, Huawei’s fate will ride on how the trade negotiations go between these two countries this week. And the atmosphere is quite tensed right now after China slammed U.S. companies for supporting Hong Kong. In fact, recently, Chinese companies like Vivo, Tencent, and CCTV suspended ties with the American NBA association after a  Houston Rockets executive tweeted supporting Hong Kong’s pro-democracy protesters.

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(Source)

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Ever since the US trade ban, Huawei’s global sales have taken a hit. The company’s market share and shipments in Europe have declined and it looks like its global prospects are still uncertain. The temporary license that was granted to the company back in May has been extended. But considering how it applies to only existing products, the brand’s new models like Huawei Mate 30 series are going to be affected by this trade ban.

The Mate 30 series is the first major flagship lineup from Huawei after the trade ban came into effect in May. The phone is set to take on the likes of the Samsung Galaxy Note 10+ and the upcoming iPhones with a powerful camera setup and a waterfall display. However, the phone’s global prospects look dim as South China Morning Post reports that Huawei could delay the global release of the handset due to the trade ban.

RELATED: Huawei Mate 30, Mate 30 Pro likely to launch on September 19

While Huawei has been scrambling to stabilize its supply chain with non-US based replacements, the software is one area where there aren’t any viable replacements. Essentially, Android is an open-source platform, so the Mate 30 series could use an unlicensed version of the OS. However, without Google Services onboard, which has become a very important aspect of Android for international users, global sales are definitely going to take a hit.

Editor’s Pick: Google hints Huawei Mate 30 series isn’t licensed to use official Android

Even if Huawei decides to use its self-developed HarmonyOS, that still doesn’t solve the issue of the lack of Google Apps. So for now, HarmonyOS doesn’t look like a viable solution to the problem. If we don’t see a change in the current situation between the US and China, Huawei will have to be prepared to take a significant hit in its overseas sales.

It could offset some loss with a more aggressive China strategy. In fact, a recent Canalys report indicates that nearly 64 percent of Huawei’s global sales were from China in Q2 2019! We could see this figure further go up very soon as Huawei aims to grab nearly 50 percent of the market share in China by the end of this year, up from 38% right now.

UP NEXT: Rumors claim Geely-Huawei partnership, Harmony OS powered cars coming soon?

(Source)

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Patents are one of the biggest assets for any technology company and last month, Huawei decided to retaliate to the US trade ban by demanding Verizon to pay over $1 billion in total as fees for over 230 patents. Now, two US senators want to block Huawei from buying or selling US patents by introducing a new bill in the country.

The WSJ reports that the bill essentially seeks to give power to the US federal government to stop companies listed on its trade blacklist from buying, selling, or exclusively licensing US patents. It would give the government the authority to step in any domestic case relating to patent infringement. Further, the bill will force the blacklisted company to notify the Justice Department as well as the Patent and Trademark office of such a case and provide details on the infringement, financial implications, and damages demanded.

Editor’s Pick: Huawei says HongMeng OS is not for smartphones, will keep using Android

The bill is clearly aimed at Huawei who is currently in the government’s crosshairs. Naturally, the Chinese telecommunications giant is not happy with this bill. The WSJ report adds a statement from Andy Purdy, chief security officer for Huawei Technologies USA – “If (this bill is) adopted, it could have severe negative ramifications by creating global mistrust of the U.S. and its ability in upholding, as well as safeguarding intellectual property rights.”

While Trump’s comments from the G20 summit had eased some of the tensions between the US and China, there are still a lot of new developments worsening the situation. For example, US-based Cape, a cloud platform vendor for drone telepresence and data management, abruptly stopped support for the popular drone maker, DJI as well as other Chinese drone makers. On the other hand, a recent editorial for the state-run Globaltimes argues that China could anytime leverage its position in rare earth minerals to pressurize the US.

Overall, it looks like this trade war is far from over and we’ll see a lot more developments in the coming months.

UP NEXT: Huawei Mate X Foldable gets listed on TENAA; China launch seems imminent

(Source)

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Huawei is said to be reviewing its relationship with the US-based multinational courier services provider, FedEx after it reportedly diverted a couple of Asia bound shipments to the US. This screw up comes at a time when China and US tensions are at an all-time high. FedEx has confirmed this mistake.

There were four shipments in total that were rerouted or attempted to be rerouted to the US. Two shipments originating from one of Huawei’s suppliers in Japan were headed to its China branch, while the other two originated from another supplier from Vietnam and were headed for the company’s branches in Asia. The shipments from Japan were rerouted, without authorization from Huawei or its sender, to the US. The other two shipments from Vietnam were also attempted to be rerouted to the US.

FedEx has said that these shipments were ‘misrouted in error’ and it was not made on the directions of any third party.

“This is an isolated issue limited to a very small number of packages,” said FedEx, in a statement to Reuters, referring to the four parcels affected. “We are aware of all shipments at issue and are working directly with our customers to return the packages to their possession.”

The company has even formally published an apology letter on China’s Weibo regarding this goof up. It reiterates that this was a shipping error and there are no external third parties involved.

However, considering the rising tensions between the two world superpowers, Huawei didn’t take it lightly. In a statement to the Reuters, Huawei spokesperson said,

“The recent experiences where important commercial documents sent via FedEx were not delivered to their destination, and instead were either diverted to, or were requested to be diverted to, FedEx in the United States, undermines our confidence. We will now have to review our logistics and document delivery support requirements as a direct result of these incidents,”

Huawei also confirmed that the said shipments only had documents. So, there wasn’t any technology involved.

The timing of this goof up from FedEx couldn’t have come at the worst time. With even non-US companies like ARM and Panasonic struggling to keep relationship with Huawei, the company is in a tight spot right now. After this, we’ll have to wait and see if Huawei continues to work with FedEx in the future.

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(Source)

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After ARM reportedly stopped all business dealings with Huawei because of technology being developed in the US to comply with the order passed by the Trump administration in the United States, it’s now Panasonic to seize dealing with the Chinese giant.

Japan-based Panasonic has announced that the company has stopped shipments of certain components to Huawei Technologies in order to comply with U.S. restrictions on the Chinese company. In a statement, the company said: “Panasonic has instructed employees to halt transactions with Huawei and its 68 affiliates covered by the U.S. ban.”

While the Osaka-based company does not have a major production site for components in the United States, it said the ban applies to goods having 25 percent or more of U.S.-originated technologies or materials.

However, the company has declined to comment on which components are subject to the ban and where they are getting produced. Panasonic makes a wide range of devices for smartphones, cars, as well as factory automation equipment.

Last week, the U.S. Commerce Department blocked Huawei from doing any kind of business with the US-based companies and buying goods made in the U.S. It is claiming that the firm was involved in activities contrary to national security but has not provided any proof for its allegations.

Read More: Huawei’s own mobile operating system is coming in the Fall, features Android app compatibility

However, the United States temporarily eased the restrictions on Huawei on Monday, to minimize disruption for customers, for a period of 90 days. During this time, the company can purchase American-made goods for maintaining existing networks and provide software updates to existing Huawei handsets.

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After the ban on Huawei by the Trump administration in the United States which bans US-based company from doing business with the Chinese telecom giant, Huawei tried to put on a strong face. However, the company’s business is looking bleak at this moment and the uncertainty about its future is severely affecting the company’s sales.

The UK-based trade-in site Music Magpie revealed that it saw a huge increase in Huawei trade-ins during the 24 hours that followed Google’s announcement of suspending business ties with the company on Sunday. The site reported a surge of 154 percent for the company’s smartphones and, by 1 PM BST on Monday, Huawei devices were being sold more than any other brand.

A report from ADSLZone claims that within the space of just 36 hours, over 10,000 Huawei orders were canceled on Amazon’s Spanish website. Moreover, the mega Prime Day campaign that Huawei was planning with Amazon has reportedly been canceled. The company has also suspended all digital as well as retail advertising campaigns in Spain, including those focused on its latest flagship, the P30 Pro.

El Pais reported that sales in local department stores such as El Corte Inglés and Mediamarkt have fallen between 50 percent and 70 percent in Spain since the news broke on Sunday. Further, Spanish customers have returned over 15,000 Huawei devices to Amazon over the past few days.

In the Asian markets, Japan’s Softbank and KDDI have postponed the launch of numerous Huawei devices, including the P30 Lite that was set to go on sale this Friday, May 24th. Like Vodafone and EE in the UK, the reason for this decision is the uncertainty surrounding future device support.

It’s pretty evident that these recent developments are already starting to affect Huawei’s business. Even when the situation improves, the negative impact will likely ease off, but the company will undoubtedly come out with a severely damaged reputation.

Read More: Huawei reported to have already stockpiled 12 months of parts ahead of the US ban

After the ban on Chinese technology giant, many companies including Google, Intel, Qualcomm, and ARM among others have suspended business with Huawei in order to comply with the order from the US government. However, the US recently eased some aspects of the ban by 90 days, allowing Android OS updates to be certified on existing Huawei and Honor phones.

(Sources – 1, 2, 3)

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The Chinese government has stated that the U.S. is opening fire towards the world with their menaces regarding new commercial tariffs. New tariffs from the U.S. for $34 billion of Chinese goods will come into force starting from tomorrow. China will reply to this with its own fees which could come into force even before due to the time zone.

A few days ago, the U.S. President Donald Trump said that if Beijing will rebel to U.S. fees with further retaliation, he will be ready to set further tariffs which may hit up to $450 billion of Chinese products. Beijing said it will never fire the first shot and this means that the latest Chinese tariffs are just an answer to the ones set by the U.S. But if the U.S. will set $50 billion worth of tariffs on Chinese technologies and intellectual properties, Beijing will be ready to retaliate.

RELATED: ZTE’s Troubles Are Far From Over As US Lawmakers Try To Reinstate Ban

According to Beijing, China is not seeking a trade war, as long as the U.S. stops opening fire on the entire world with its extra duties aimed to enhance the U.S. economy and discourage exports. Consumers from the U.S. should not be affected by the new duties, but Chinese companies such as Huawei and ZTE would be.

(via)

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