Huawei in the storm of U.S, China trade war

LAGOS, Nigeria – United states of America and China’s massive trade war is highlighted the US ban on two of china’s best known companies .  Both governments have been making some big decisions. But none has been more significant than the ban on Huawei. 

Huawei was founded by Ren Zhengfei a former  People’s Liberation Army technologist in 1987,after a workforce reduction ended his military career . The company just like any start up had a tumultuous start in China.

The first decade for this future Chinese tech giant was mostly quiet, but not without controversy. The company got its big start by allegedly reverse engineering international telecommunication technology and re-introducing them in China. Although there’s no solid proof of this, intellectual property (IP) theft in China is said to be quite common.

Huawei , got Its first big-break contract with the People’s Liberation Army sometime in the mid-1990s. Later in the decade, China adopted a new directive which gave and supported domestic technology companies explicitly over foreign companies. This move gave startup companies like ZTE and Huawei a clear and specific path to grow as they certainly benefited from these policies.

The company had a smooth rise to the top until 2001 when Huawei was placed on a watch list by India’s intelligence agencies for allegedly supplying the Taliban with military telecommunications equipment. However, India never brought charges for it, and no evidence ever surfaced to prove it. Huawei denied doing any business with the Taliban and swore its practices were in line with the rules of the United Nations.

China applied and later joined the World Trade Organization later in 2001. The stipulations for joining were steep for China and included reversing many of its domestic-first policies. The huge ramifications of China and its economy joining WTO not only led to the uplifting of these Chinese company resulting in Huawei opening its first office in the U.S and Britain as well.

Sometime in 2003 Cisco accused Huawei of stealing source code from its routers and filed a lawsuit in what is seen as Huawei first major trade war. Huawei later admitted to this, and the case was eventually dropped after Cisco and Huawei reached an agreement and settled out of court.

Things started to heat up for Huawei in 2007, when it made a bid to buy 16.5 percent of 3COM, a Massachusetts tech company. Huawei didn’t view the purchase as problematic, as the two companies previously worked together to make industry routers and switches and it would only control a small part of the company.

But American lawmakers asked the Bush Administration to block the purchase, calling Huawei one of China’s least transparent companies. The deal was eventually blocked by the U.S. government  in 2008 due to what it called national security concerns. While at the same time, the FBI began investigating Ren Zhengfei, Huawei’s founder, looking for potential violations of U.S. trade sanctions in Iran between 2006 to 2008, the very thing they would later charge Huawei with in 2019.

A year later in 2009, British authorities warned BT Mobile about vulnerabilities to Chinese attack due to security holes in Huawei’s equipment.  Vodafone also found backdoors in Huawei’s equipment between 2009 and 2011, but didn’t report anything until 2019. Huawei claims to have fixed those vulnerabilities. During this time crisis, the company launched its first android device.

Between 2010 to 2017, Huawei’s relationship with the U.S. was  reasonably lousy in other words, it was neither here nor there. For instance Motorola sued the tech giant for corporate espionage in 2010. Huawei denied everything and the suit was eventually settled in 2011. The company’s bid to build Sprint’s Mobile Network was ultimately blocked by the Obama administration for national security concerns.

Huawei ended the year trying to purchase 3Leaf systems but later  backed out because it did not file the sale with CFIUS. This prompted an open letter to the U.S. from Huawei. The company would continue to have bad luck in it’s USA trade in 2011. Despite its troubles in the USA, Huawei built a 200,000 square foot research facility in California in April 2011. However, the government still blocked Huawei’s bid to build a national wireless network for emergency services that year, due still to national security concerns.

National security concerns are a common thread in most of Huawei controversy. An 11-month investigation in 2012 by the U.S. ended up in an oft-cited report that both Huawei and ZTE could not be trusted. The report also alleged unusual behavior from Huawei equipment and accused the company of sending data to China.

However, the findings focused on telecom equipment only and not mobile phones produced by either ZTE’s or Huawei. The public version of the report did not show any proof of these accusations or produce any lead to these claims , but there are rumors it’s in the classified version. This came just months after Australia blocked Huawei from its National Broadband Network. While 2013, Softbank promised not to use Huawei equipment on Sprint’s network if it were to be allowed to buy Sprint.

When the Edward Snowden leaks came out, it also included some bits about Huawei. The leaks unveiled Operation Shot giant, a U.S. plan to hack Huawei servers and use its equipment to spy on it. The hacks were allegedly successful. But the company took the news with humor, and then openly encouraged the U.S. government to make the findings of the hack public.

In 2015, Ren Zhengfei took to the airwaves to define the company, telling the world that Huawei didn’t spy for the Chinese government. During this time, T-Mobile allegedly used wireless patents without paying for them. Huawei demanded no money in the lawsuit against T-Mobile, just that the courts acknowledge the patent licensing was fair. In late 2017, T-Mobile got its revenge when a federal court ruled in its favor in the famed Tappy the robot lawsuit. The U.S. Commerce Department also subpoenaed Huawei in respect to exporting goods to Cuba, North Korea, Syria, and the Sudan.

Huawei’s struggles in the United States for several reasons took another turn when the U.S. decided to review China’s intellectual property policies toward the end of 2017. Then, in January of 2018, the U.S.-China trade war officially started, and tensions have escalated quickly with Donald Trump being far more aggressive in dealing with China than any previous U.S. Presidents.

During the period leading to and after the ban Huawei lost a number of businesses such as Verizon Wireless dropped Huawei as a phone supplier in January of 2018, not long after AT&T also agreed to and then refused to sell Huawei’s mobile phone. Mate 10. T-Mobile then promised that no Huawei tech was going into its 5G network and offered to help rural carriers replace their Huawei existing equipment.

A month later, the heads of no less than six U.S. intelligence agencies warned against the use of Huawei and ZTE products. And memo leaked from the Trump administration around this time suggested the Chinese companies are a threat when it comes to 5G networks. A project in which the company is the world leader.

Australia then double down and banned Huawei from supplying parts for 5G networks in the country followed closely by New Zealand. Japan created a ban of its own for both Huawei and ZTE products.British mobile (BT Mobile) eventually begin removing Huawei equipment from its network in 2018, with completion due in 2021, and the Pentagon banned Huawei devices on military bases and the National Defense Authorization Act passed in the U.S. that barred government agencies from buying certain Chinese equipment.

Perhaps the biggest news of 2018 was the arrest of Huawei Chief Financial Officer, Meng Wanzhou in Vancouver. Canada did so on behalf of the U.S. government with extradition to the US as the primary goal. Meng is currently under house arrest, and the next court date is set for September 2019. The company also released a statement on May 8th, 2019 demanding a stay of extradition, citing alleged misconduct by the RCMP, CBSA, and FBI during Meng Wanzhou’s arrest. Shortly after her arrest, China then arrested two Canadians over national security concerns. This act brought a 90-day truce to the U.S. and China trade war.

Then things got even crazier after the 90days truce as the U.S. formally charged Huawei with 13 crimes, including bank fraud, dealing with Iran, and IP theft. Huawei denied or deflected the allegations, but the U.S. maintains it has proof, but none of which has been made public currently. Ren Zhengfei again took to the airwaves after years of avoiding the public eye to assure the world that Huawei sided with customers, not governments. By this time, Poland also admitted it didn’t know if it’ll use Chinese tech for its 5G network. The EU also began talking about banning Huawei from all of Europe’s 5G networks

But Europe eventually decided on stronger regulations rather than banning Huawei from their 5G networks altogether.China took to the WTO to challenge Australia’s ban on Huawei products.

The U.S. turned up the heat again on May 15, 2019 when it added Huawei to its Entity List. As at this day, several USA company like Google, Intel, Qualcomm, Arm, the SD Association, and others announced they will comply with the U.S. order and stop working with Huawei. The Chinese company on the other hand also released several statements, with the most notably one mentioning a plan ‘B’ in case the entity list ban is never lifted.

Huawei also made an official statement trying to explain it position with regard to development in its 5G networks. The long term ramifications of such a move are fairly massive, given Huawei’s size and placement in the mobile phone ecosystem.

The case against Huawei isn’t actually totally clear. It is accused of a bunch of misconduct, equipment flaws, spying for the Chinese government amongst others , but the truth so far is that there is no hard evidence or proof at least, nothing in the public space. Also, there are multiple occasions where Huawei encouraged the U.S. to share whatever evidence it has or make it public. The company has worked extensively with the Chinese government, but there isn’t concrete evidence showing it is a part of the Chinese government.

The warnings and allegations stretch back over a decade, but the lack of proper proof pour some water into what the U.S has against the company. Even Vodafone and BT Mobile backdoors which have led some to question Huawei in the past, still this could be seen as common security flaws which can be repaired. But Huawei may just be the make weight in the trade war between the USA and China, but we simply don’t know. Add this to its recent gains in the 5G technology and you will see where it is all heading to. 

Huawei’s recent release of its activities, as well as the 23% increase of sales and profit in spite of the ban shows that many countries are still willing to work with the company. Its smart phones are rated amongst the best in the world same as some of its equipments.

As the world hope the top two economic powers in the world sort out their differences Huawei as an international company from China has come to stay and as the founder of the company said “Huawei as a company will never undertake any spying mission for China”. Further still, it shows the company is determined to stay for a long time if current event are anything to go by. 

NB:Steve Aya, is a Nigerian Journalist base in Lagos,editor of New Name Magazine and the online paper, niajaeagle.blogspot.com. contact at [email protected] 08023901229