Why It’s So Hard for the U.S. to Ban Huawei
Almost a year after it was announced, the U.S. government’s ban on Huawei has not been enforced
In May of 2019, the United States government made the extraordinary decision to ban U.S. companies from buying equipment from the Chinese tech giant Huawei over concerns that its technology represented a national security risk. But almost a year later, the ban still hasn’t gone into effect. Instead, earlier this month, Huawei received its fourth “temporary” license to continue operating in the U.S.
It turns out untangling the international telecom industry is more complicated than it sounds.
Prior to the ban’s announcement, if Americans knew of Huawei at all, it was for the company’s smartphone business. In a relatively boring smartphone market, Huawei introduced phones with powerful zoom lenses and the company even introduced a foldable phone that could’ve given Samsung a run for its money.
But Huawei’s smartphone industry is only a small part of the business it does in the U.S. The vast majority of its business here is network equipment, and the company is deeply entrenched in the U.S. tech ecosystem. In 2019, Huawei accounted for 29% of the global telecom equipment market, selling equipment used to build cell towers and connect smartphones to the internet. Its two closest competitors, Nokia and Ericsson, made up 30% of the market combined. No single company manufactures more networking gear than Huawei. Some of that gear isn’t even made by U.S. manufacturers.
Still, the U.S. government insists that the company can’t be trusted with connecting its citizens. The U.S. intelligence claims that the company can use “back doors” designed for law enforcement to access the networks its hardware is installed in. Huawei denies the allegations.
This puts American network providers in a tough spot. Huawei’s hardware is a crucial component of the 5G rollout. Cell companies have already started advertising their 5G networks, promising faster download speeds but also transformative connections that could enable smart cities and connected cars. Some carriers are even branding the upgrade as part of the “fourth industrial revolution.”