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Google Restricts Huawei’s Access to Android After Trump Order Google Restricts Huawei’s Access to Android After Trump Order
(about 3 hours later)
LONDON — The Chinese technology giant Huawei on Monday began feeling painful ripple effects of a Trump administration order that effectively bars American firms from selling components and software to the company. LONDON — The Chinese technology giant Huawei on Monday began to feel painful ripple effects of a Trump administration order that effectively bars American firms from selling components and software to the company.
Huawei said that Google was cutting off its access to support for many Android hardware and software services. The move, in response to last week’s announcement in Washington, could hamstring Huawei, the world’s second-largest smartphone maker, if it ultimately restricts access to the latest versions of popular Google services such as Maps and Gmail. The company said that Google was cutting off support to Huawei for many Android hardware and software services. The move, a response to the administration’s order last week, could hamstring Huawei, the world’s second-largest smartphone maker, if it ultimately restricts access to the latest versions of popular Google services like Maps, Gmail and the Google Play app store.
Google said its services would continue to function on existing Huawei devices. “We are complying with the order and reviewing the implications,” the American company said. Google’s decision to halt work with Huawei was first reported by Reuters. In isolating Huawei, the Trump administration is escalating its dispute with Beijing and harming a company that the American authorities have accused of posing a national security risk, charges that Huawei has vehemently denied. After struggling to convince allies like Britain and Germany to block the use of Huawei telecommunications equipment, the United States is now undermining the Chinese company’s business by moving to cut it off from crucial American suppliers, including the makers of semiconductors.
In isolating Huawei, the Trump administration is escalating a trade dispute with Beijing and harming a company that the American authorities have long accused of posing a national security risk — charges that Huawei has vehemently denied. After struggling to convince allies like Britain and Germany to block the use of Huawei telecommunications equipment, the Trump administration is now undermining Huawei’s business by cutting off its access to crucial American suppliers, including chip makers. The quick action by Google shows how some of the world’s largest companies are entangled in the growing Cold War between the United States and China over technology and trade. The global technology industry has flourished in part because of the borderless nature of its digital products and services. It is now scrambling to account for the potential damage of a trade dispute between the world’s two largest economies.
In complying with the Commerce Department’s order, Google is undercutting ties with an important and fast-growing partner. Huawei’s sales in the first quarter of 2019 grew 50 percent compared to the same period a year earlier, even as the broader smartphone market stagnated, according to the market research firm IDC. Google’s change applies to new Huawei devices and future versions of the Android operating system. Security and feature updates will still be available for Huawei users with Google apps already loaded on their devices.
While Huawei products have effectively been blocked in the United States for years, the company’s business has grown rapidly in Africa, Asia and Europe, where its affordable prices have been embraced by consumers and by phone companies that use its antennas, base stations and other equipment to make wireless networks. “We are complying with the order and reviewing the implications,” Google said. The company’s decision to halt work with Huawei was first reported by Reuters.
President Trump last week issued a ban on American telecommunications firms’ installing foreign-made equipment that could pose a threat to national security. The order instructed the commerce secretary, Wilbur Ross, to stop transactions “posing an unacceptable risk.” While it did not single out any company by name, the order was widely believed to be aimed at Huawei and others in China’s tech sector. [Tech stocks sink after Google restricts Huawei’s access to Android.]
[Tech stocks sink after Google restricts Huawei’s access to Android] By adhering to the Commerce Department’s order, Google is undercutting ties with an important and fast-growing partner. Huawei’s smartphone sales in the year’s first quarter grew 50 percent compared with the same period a year earlier, even as the broader handset market stagnated, according to the market research firm IDC. Google gets revenue from ads that are shown with the apps carried on Huawei devices.
On the same day, the Commerce Department added Huawei to a list of companies deemed a risk to national security, effectively preventing the company from buying American parts and technologies without special permission from Washington. Since then, chip makers including Infineon, Intel and Qualcomm have told employees to cease working with Huawei until further notice, according to Bloomberg and other news outlets. Intel declined to comment, while Qualcomm and Infineon did not immediately respond to requests for comment. Huawei smartphones and some of its other products have effectively been kept out of the United States for years, but the company’s business has grown rapidly in Africa, Asia and Europe, where its affordable prices have been embraced by consumers and by phone companies that use its antennas, base stations and other equipment to make wireless networks.
On Monday, shares in Qualcomm and Infineon were trading about 5 percent lower; Intel was down more than 1 percent. President Trump last week issued a ban prohibiting American telecommunications firms from installing foreign-made equipment that could threaten national security. The order instructed the commerce secretary, Wilbur Ross, to stop transactions “posing an unacceptable risk.” Although the order did not single out specific companies, it was widely believed to be directed at Huawei and others in China’s tech sector.
Huawei has not yet said how it will respond to the Trump administration order, but the Chinese government on Monday suggested a legal challenge. Asked about Google’s decision at a regularly scheduled news briefing on Monday, Lu Kang, a spokesman for the Ministry of Foreign Affairs, said: “China encourages Chinese companies to take up legal weapons to defend their own legitimate rights.” On the same day, the Commerce Department added Huawei to a list of companies deemed to be national security risks, effectively preventing it from buying American parts and technology without special permission from Washington.
In a statement, Huawei said: “We have made substantial contributions to the development and growth of Android around the world. As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefited both users and the industry.” Since then, chip makers, including the German supplier Infineon, have said they would restrict their business dealings with Huawei. “In any market where Infineon operates, we fully comply with all applicable legal requirements, laws and regulations,” the company said in a statement.
The American campaign against Huawei comes as countries around the world prepare to build next-generation wireless networks, known as 5G, that are predicted not only to bring faster cellular service, but also to connect new devices such as autonomous cars, medical tools and industrial equipment to the internet. Intel and Qualcomm, two of the world’s largest makers of chips, have also told employees to cease working with Huawei until further notice, according to Bloomberg. Intel declined to comment, and Qualcomm did not respond to requests for comment.
The Trump administration has urged allies including Britain and Germany to ban Huawei from supplying equipment for the new high-speed networks, though the countries have signaled they are unlikely to completely bar the company. On Monday, shares in Qualcomm and Infineon were trading about 5 percent lower; Intel was down more than 1 percent. Shares in Alphabet, Google’s parent, were down about 1.6 percent.
The American campaign against Huawei coincides with preparations by countries around the world to build the next-generation wireless networks known as 5G. The new networks are expected not only to bring faster cellular service, but also to connect new devices like medical tools, industrial equipment and autonomous cars to the internet.
The actions put pressure on American allies that have so far resisted urging from the Trump administration to issue complete bans against Huawei. James Lewis, a senior vice president and the director of the technology policy program at the Center For Strategic and International Studies, said that most European countries would prefer a softer approach.
“I don’t think Europeans realize the extent of the strength of feelings in the U.S. that we need to block Huawei,” Mr. Lewis, a former official at the State and Commerce departments, said.
The actions will test the durability of Huawei’s business, which has long depended on access to products from American companies. The orders are reminiscent of sanctions imposed by the United States in 2016 against ZTE, a smaller Chinese telecommunications firm.
ZTE was added to the Commerce Department’s so-called entity list after the company was found to be violating rules against selling American-made goods to Iran. ZTE initially agreed to pay a large fine, but the Commerce Department said the company was not abiding by its agreement’s terms. American companies were barred from selling to ZTE, which nearly collapsed before Mr. Trump eased the penalties.
Huawei has not said how it plans to respond to the Trump administration’s order, but on Monday the Chinese government suggested the possibility of a legal challenge. Asked about Google’s decision at a regularly scheduled news briefing on Monday, Lu Kang, a spokesman for the Ministry of Foreign Affairs, said, “China encourages Chinese companies to take up legal weapons to defend their own legitimate rights.”
In a statement, Huawei said, “We have made substantial contributions to the development and growth of Android around the world. As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefited both users and the industry.”