25QILAI
SHEN/BLOOMBERG;
DATA:
COMMERCE
DEPARTMENT
THEBOTTOMLINE TheChinesetechgiantis workingon
contingencyplans,operating 24 hoursa daytoovercomethe
restrictionsimposedbybeingonTrump’sblacklist.TheU.S.government’sactionscouldthrottle
whathasbeena periodoftremendousgrowthfor
Huawei.Thecompanyis theworld’stopprovider
ofnetworkinggearandtheNo.2 smartphoneven-
dorafterSamsungElectronicsCo.TheU.S.banis
unsettlingchipmakersfromtheU.S.toEuropeasthe
globalsupplychaincomesunderthreat.It couldalso
disrupttherolloutworldwideof5Gwireless,under-
mininga standardthatwillpowereverythingfrom
autonomouscarstorobotsurgery.
Trumphassaidtherestrictionsarea necessary
responsetoHuaweihelpingBeijingspyonothergov-
ernments.Thecompanyforyearshasbeenaccused
of—andsuedfor—stealingintellectualpropertyfrom
severalbigcompanies,includingCiscoSystems
Inc.andT-Mobile;Huaweihasdeniedallcharges.
“WeareaheadoftheU.S.If wewerebehind,there
wouldbenoneedforTrumptostrenuouslyattack
us,”HuaweifounderRenZhengfeitoldBloomberg
TelevisiononMay24.
Huawei brass watched the Commerce
DepartmentbringanotherChinesecompany,ZTE
Corp.,toitskneesin2018,notinghowWashington
forcedZTEtorevampmanagement,paya 10-figure
fine, and give U.S. observers access to its inner work-
ings. They swore then that, when the time came,
Huawei would be prepared. “We are on the right
side of history,” the company wrote in an internal
memo after the ban was announced. “After every
storm, there is a rainbow. We expect every one of
you to stay confident, remain dedicated, and dili-
gently fulfill your duties.”
Huawei is said to have stockpiled enough chips
and other vital components to keep its business
running for at least three months, according topeoplefamiliarwiththematter.Someofits180,000
employeesremainoptimisticthatBeijingwillresolve
itsdisputewithWashington.Othersareconfident
theChinesegovernment will step in with either cap-
ital or policy changes to prop up the company.
On May 17, the same day Huawei was blacklisted,
China announced a tax waiver for local chip design
and software companies. That means HiSilicon,
the secretive chipmaking division that’s leading
Huawei’s efforts to wean itself off American semi-
conductors, won’t be required to pay any taxes over
the next two years.
Still, anxiety is creeping through Huawei offices
from Tokyo to Sydney, employees say. “We can’t
deny that it’s had a negative impact, as bad news
around Huawei is reported every day,” one of them
says. “But employees in Japan are rallying, and
we’re just trying to keep working as usual. Some
of our customers are even trying to cheer us up.”
As Huawei marshals its troops, the U.S. contin-
ues to exhort governments around the world to
shun its equipment. Australia and New Zealand
have banned its gear, and Japan has effectively done
so, while others, including the U.K., are weighing
their options. Trump has said the restrictions on
the company could be lifted as part of a trade deal
with China, but negotiations have stalled. “The
fundamental question here is, is this a negotiating
lever as part of a trade deal?” says Chris Lane, a
Sanford C. Bernstein analyst. “If the ban goes on a
long time, Huawei will lose a lot of market share.”
�Bloomberg News▲ New employees at
Huawei’s training facility
in Dongguan, ChinaChinaRussiaHongKongU.A.E.PakistanTurkeyBelarusIranSaudiArabiaSingaporeU.K.● Companies and
people banned by the
Commerce Department
in the past year, by
country of origin18 entities91391113221