China prepares to strike back at United Stats as Huawei suffers another loss

SoftBank snubs Huawei for 5G equipment while China mulls rare earths embargo

China prepares to strike back at United Stats as Huawei suffers another loss

 Trade tensions between the United States and China appear to be on the brink of escalation, with the latter taking steps to respond to the US ban on doing business with Huawei. Bloomberg reports that China has put in place preparations to restrict exports of rare earth minerals to the United States, while establishing its own blacklist of "unreliable entities" for unfavorable foreign companies. At the same time, Japan's SoftBank announced that it will build its 5G network with equipment from Nokia and Ericsson, snubbing Huawei, which had been a 4G provider for the large mobile carrier.

The rare earth export restriction seems to be a saber rattling act at the moment. Beijing officials say they are ready and willing to deploy this harsh measure, but according to Bloomberg, it is only if the trade war between China and the United States intensifies. Neodymium is one of the most recognizable rare earths because it is widely used in magnets. You will have seen it announced on the data sheet of your headphones, most likely, and there is a broad consensus among economists and international trade observers that US companies do not have good alternative sources for this. outside of China.

Regarding the list of Chinese entities, this echoes the language of the list of entities from the US Bureau of Industry and Security that Huawei is currently on. This could be a deliberate sign of a response from a tit-for-tat, because China does not really need an official list, having already imposed bans on a number of companies leading US like Google and Facebook. The list will cover "foreign companies, organizations and individuals who do not comply with market rules, violate contracts and block, cut supply for non-commercial reasons or seriously undermine the legitimate interests of Chinese enterprises", according to Chinese national radio, citing a government official. In simple terms, China replicates US equities and takes a stronger stance as it prepares to enter its next round of negotiations.

Huawei, the company that is at the center of the frictions in this commercial dispute, suffered a significant loss in the form of SoftBank's 5G business. The performance of Huawei's network equipment has rarely been controversial, but concerns over its security vulnerabilities and the company's dealings with the Chinese government have weighed on its customers' minds. business. SoftBank's decision now is probably a mix of this roadmap and the current turbulence caused by Huawei's US blacklist. This is one of those consequences that will have a lasting impact, even though trade relations between the United States and China are improving rapidly. Even if the current stalemate is resolved quickly, Huawei's reputation as a reliable smartphone maker for consumers and a reliable 5g provider for mobile operators will remain tarnished.