DNA Edit: Huawei sans Google – US-China trade war has started in the right earnest

The US-China trade war is going to impact the world, and by the looks of it, the countdown has begun. Google has suspended business with Chinese major Huawei that requires the transfer of hardware, software and technical services except those publicly available via open source licencing. The move is a blow to the Chinese technology company that the US government has sought to blacklist around the world. The decision by Alphabet — Google’s parent company — could hobble Huawei’s smartphone business outside China as it will immediately lose access to updates to Google’s Android operating system. The next version of its Android smartphones will also lose access to popular services including the Google Play Store, Gmail and YouTube apps. In other words, Huawei will only be able to use the public version of Android and will not be able to get access to proprietary apps and services from Google. 

The Trump administration on Thursday added Huawei Technologies to a trade blacklist, immediately enacting restrictions that will make it extremely difficult for the company to do business with US counterparts. On Friday, the US commerce department said it was considering scaling back restrictions on Huawei to prevent the interruption of existing operations and equipment. The extent to which Huawei will be hurt by the US government’s blacklist is not yet known as its global supply chain assesses the impact. Chip experts have questioned Huawei’s ability to continue to operate without US help. So it would be fair to say that the US has called China’s bluff. But China too has been preparing for such an eventuality. The impact of the US order is expected to be minimal in the Chinese market. Most Google mobile apps are in any case banned in China, where alternatives are offered by domestic competitors like Tencent and Baidu.