Huawei's issues with the US government have been detailed quite a bit over the last few weeks, with the arrest of its CFO and a couple of executives in Poland this week. Now, Huawei is facing a new problem: the US is blocking exports of some of its products. The company is unable to export some of the tech that it developed in the US, back to its homeland of China.
The company's research and development unit, Futurewei Technologies Inc., has had its export license lapse. This is not because of the government shutdown that is currently ongoing, but because the Commerce Department decided that it would not renew its license. Making it so that it's nearly impossible to export that tech back to its homeland, and where its headquarters is, in Shenzhen, China.
The Commerce Department stated in a letter back in June, that it planned to deny the company's application to renew the export license, stating that it was a matter of national security. Futurewei has been looking to contest the decision, but in the meantime, exporting its technologies has been prohibited.
Futurewei's export license covered telecommunications technology and software, and that includes high-speed data-transfer technology. This also had an operating budget of more than $16 million, which also employed around 40 employees, full-time. This isn't a big blow to Futurewei, according to people familiar with the matter, because the majority of technologies that it exports from the US don't require this export license. The company will also continue to operate in the US, for the time being.
Yet another setback for China's largest smartphone maker
Huawei's obstacles in the US are continuing to mount. Recently, the company has had trouble in other countries outside of the US. The company's CFO was recently arrested in Vancouver, though not for spying like the recent arrests in Poland. The CFO was arrested for her role in helping the company sell products to Iran and North Korea, even though there are sanctions in place for both countries. Violating sanctions is a big no-no for the US government, especially since the products that were sold to those countries included US technology. This is what brought down ZTE in the US, and essentially killed the company, before it broke a deal to get back in business. Though its reputation was already killed before it got back in business, and it's now paying the price.
Despite not selling many products in the US, Huawei has a few offices scattered across the country
Huawei has partners here in the US, including Google and Microsoft. So as any company that is making devices with those two tech giants, Huawei has offices here in the US. In fact, there is one in Mountain View, which is nearby Google's office, allowing the company to work closely with Google. This is important since Huawei does sell Android smartphones – in fact it shipped over 200 million of them in 2018. Huawei works with Microsoft, since it does sell Windows-powered laptops now too. It also has offices in Texas and elsewhere in the US. Huawei currently employs around 1,500 people in the United States. Though with the way things are going in the US, that number may dwindle pretty soon.
Despite having offices in the US still, it has cut its public outreach from a pretty large group of employees to almost no one. This makes sense though for Huawei, seeing as the US are essentially keeping them from selling products in the US – only thing they can really sell are laptops, and given the tarnished name it has now, that is even a stretch. So why bother paying to market these products in the US, if they can't be bought in the US. Shortly after its deals with AT&T and Verizon were scraped at CES last year, Huawei turned to Europe for expansion and basically left the US in the dust.
Inside the contiguous US isn't the company's only issue at this point. As the US has been pushing its allies to stop using Huawei's products and technologies as well. This has led to Australia banning Huawei equipment on its 5G networks, Norway is thinking of doing the same – though it hasn't decided one way or the other yet. The US is also pushing parent companies of Sprint and T-Mobile to stop using Huawei gear in their countries of Japan and Germany, respectively, and using that as a pawn to approve the merger between Sprint and T-Mobile here in the US. So Huawei is in for a big fight, especially if it does want to continue in the US, and possibly in Europe.