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Marketplace

What makes the dollar strong?

Aug 23, 2019

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Huawei

Huawei tensions risk global tech “decoupling”

Scott Tong May 16, 2019
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SHENZHEN, CHINA - APRIL 12: A member of Huawei's reception staff walks in front of a large screen displaying the logo in the foyer of a building used for high profile customer visits and displays at the company's Bantian campus on April 12, 2019 in Shenzhen, China.
Kevin Frayer/Getty Images

Decoupling. Bifurcation. “Digital Iron Curtain.” Policymakers and tech industry insiders fear that the U.S. banning U.S. suppliers to Huawei could add momentum to unravel today’s globalized tech supply chain.

The Trump administration has placed Huawei on its “Entity List” of companies posing a national security risk to the United States. Firms on the list are prohibited from buying U.S. exports unless American companies receive special licenses from the Commerce Department. If this becomes an effective supplier ban, firms like Qualcomm, Intel, Western Digital and Google could not sell to Huawei.

Huawei, anticipating this possibility, has pursued a non-U.S. supply chain, as the Chinese government has encouraged Chinese firms to reduce their dependence on foreign suppliers. Meanwhile, the U.S. and Australian governments have banned Huawei telecom gear from domestic mobile networks, and the Trump administration is pressuring other allies to follow suit. Analysts fear the global, integrated high-tech supply chain could pull apart, stifling innovation and raising costs and prices.

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