Huawei – Caught in the Crosshairs of the US-China Trade War?
Case Code: CLECO006
Case Length: 7 Pages
Period: 1987- 2020
Pub Date: 2021
Teaching Note: Available
Organization: Huawei Technologies Co., Ltd.
Industry: Technology & Communications
Countries: United States
Themes: International Trade, Trade Agreements, Trade Blocs
The case “Huawei – Caught in the Crosshairs of the US-China Trade War” is about the dilemma faced by the Chinese telecom equipment manufacturing company Huawei Technologies Co. (Huawei) due to the sanctions imposed on it by the US, the UK, and other countries. The ban on Huawei’s telecom equipment was due to security issues that arose as the company had its headquarters in China and it was supposedly under the control of the Chinese government and therefore bound by the Chinese government’s rules and regulations. While security was one of the issues,trade disputes, protectionism, and unfair trade practices also had a role to play in the sanction. The case deals with the reasons for the ban on Huawei and its impact on the development and implementation of 5G technologies across the world. The trade war between the US and China is discussed along with analysts’ comments on the ban on Huawei. In the future Huawei was expected to be severely affected by the ban and the rollout of 5G networks in the UK was set to be delayed. It remains to be seen whether Huawei will be able to wriggle its way out of the current imbroglio and again become the topmost telecom equipment company in the world.
- Understand the dimensions of protectionism and its impact on international trade.
- Understand the importance of trade barriers for overall economic development in a country.
- Evaluate the impact of unfair trade practices on international trade.
On July 14, 2020, Oliver Dowden (Dowden), UK Secretary of State for Digital, Culture, Media, and Sport, announced that telecom companies in the UK were barred from purchasing new 5G equipment from the Chinese company Huawei Technologies Co. (Huawei) from January 2021. As part of the ban, the UK Government also instructed the telecom companies to completely remove already installed 5G equipment from Huawei from their mobile networks by the end of 2027..
Huawei; Trade barriers; Trade disputes; Trade wars; Protectionism; Unfair trade practices; Sanctions; International trade; National security; 5G; Trade policy; WTO.
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