US curbs on Huawei starting to bite

International sales of Huawei mobile phone handsets have dropped by 40% in the past month, as the US-led backlash against the Chinese telecoms giant intensifies.

Last month, the US put Huawei on a list of companies that American firms cannot trade with unless they have a licence. “The move marked an escalation in efforts by Washington to block Huawei,” says the BBC.

“The embattled Chinese tech firm has since become a flashpoint in the US-China trade war,” says CNN Business.

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In response to its effective blacklisting by the Trump administration over concerns about security, Huawei’s founder Ren Zhengfei said the company would slash production by $30bn (£23.9bn).

Despite being locked out of the US market for nearly a decade because of these concerns, Huawei has grown into the world’s largest telecommunications equipment maker and the number two smartphone brand.

While Zhengfei has previously downplayed the impact of US restrictions, he said he had not expected that US determination to “crack” the company would be “so strong and so pervasive”.

The founder’s “downbeat assessment” comes “as a surprise after weeks of defiant comments from company executives who maintained Huawei was technologically self-sufficient”, Reuters says.

The company has also been hit by a knock-on effect which has led other tech companies around the world to cut their associations with Huawei.

Google has barred Huawei from some updates to its Android operating system, while Japan’s Softbank and UK-based chip designer ARM are among a growing list of companies to suspend their business relationship.

Washington fears that Beijing could use Huawei equipment to spy on other nations. There is specific concern that the brand’s next-generation 5G mobile networks could be used by the Chinese government for surveillance.

In April, then-UK defence minister Gavin Williamson was sensationally sacked by Theresa May after allegedly leaking confidential documents which showed the UK was in talks with Huawei to roll-out its own 5G network.

The issue once again raised its head during Donald Trump’s recent state visit to the UK, when he hinted the US could limit its intelligence sharing with the UK if it agreed a deal with Huawei.

US tech expert Nicolas Negroponte, founder of the Massachusetts Institute of Technology Media Lab, said the US ban was a mistake.

“Our president has already said publicly that he would reconsider Huawei if we can make a trade deal. So clearly that is not about national security,” he told Reuters. “It is about something else.”