Trump Huawei ban to bring unexpected consequences

Injecting tech into a trade war . . .

President Trump has signed an executive order banning all U.S. companies from using or installing technologies that pose security risks to the United States – a move aimed directly at Chinese telecom giant, Huawei. The executive order was followed by a Commerce Department announcement that it was adding Huawei and its 70 affiliates to the ‘entity list,’ which limits the Chinese company from acquiring parts and technology from U.S. firms without federal approval. The move scales up the already protracted high-stakes trade war between the world’s two largest economies, with immediate global implications.

Ripple effects across the Asia Pacific . .

If the U.S. chooses to completely limit Huawei’s access to suppliers like Qualcomm or Intel, the Chinese company won’t be able to support 5G infrastructure globally. Telecom carriers around the world would have to resort to pricier alternatives from Nokia or Ericsson for 5G equipment, ultimately slowing down adoption of the fifth generation cellular network tech that promises enhanced broadband access. Huawei will be looking to new suppliers from South Korea or Taiwan. However, the availability of these alternatives depends on whether these actors join the U.S.-led ‘blockade’ against Huawei. In the long run, this latest salvo by Trump may actually further Huawei’s (and more broadly, China’s) campaign for homegrown tech R&D.

The double-edged sword for Canada . . .

Trump’s blanket ban of Huawei technologies could present an opportunity for Canada vis-à-vis its diplomatic stand-off with China following the arrest of Meng Wanzhou last December. By engaging in a frank and transparent dialogue with Chinese stakeholders about the tangle of issues (cybersecurity, rule of law, unjust detentions) surrounding the current stalemate, Canada has an opportunity to elevate its role as an actor caught in the crossfire of a complex trade/tech war between two major powers.