Now that Joe Biden is officially elected as the new US president, rightly one wonders what will happen to Huawei. It was May 2019 when the executive order of the Donald Trump administration imposed a ban as controversial as it was harmful to Chinese society. In one year it went from being one of the most relevant companies in the technological landscape to end up being ousted by many nations. Just see i sales figures in Europe, going from 2nd to 4th in a few months. But now that Donald Trump is no longer at the head of the United States, what can Huawei face?
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Joe Biden replaces Donald Trump as US president: what will happen to Huawei?
Why is Donald Trump angry with Huawei?
First, why Huawei was banned by Donald Trump can easily be traced back to its nationalist and isolationist policies. Trump conducted a real one duty war which has cracked the already historically delicate relations between the US and China. War that basically ended in early 2020, when China was engaged in the purchase of US products worth $ 200 billion over two years. A victory for Trump's policies, but one that has created a clear discontent within the markets.
How we dealt with in our editorial at the time, the clash between Huawei and the US sees reasons and wrongs on both sides. Chinese companies, Huawei in particular, have been pinched several times in carrying out anti-competitive dynamics. But it is undeniable that Huawei's inclusion in the Entity List has had some timing, coming following the period of sales drop of the American Apple. Just do 2 + 2 to understand how Trump has seized the ball to stop Huawei's advance in the West, selling in society a threat to an increasingly Asia-centric technology market.
The reasons were quite different, as we know, accusing Huawei (later also TikTok and WeChat) to be one threat to national security. A serious accusation that, however, has never seen concrete evidence on the plate; nevertheless, Huawei has suffered heavy repercussions, starting from the impossibility of equipping its devices with Google services. But what will happen now?
What will change with Joe Biden?
Let's assume that, at the moment, it is not known if and what Joe Biden will want to do to change the policies applied by Donald Trump against Huawei. But there are a number of elements to take into consideration to get an idea of how the situation could evolve. The first, perhaps most relevant, is that Joe Biden has made himself known to most people as vice president during the administration of Barack Obama, from 2009 to 2017. A historical period during which relations between the US and China (including Huawei) have turned out to be relaxed, albeit with some disagreements.
If the Trump administration has often proved over the top, with that Biden it seems that we will return to a more peaceful life. "I will be a president who unites, not divides”Is perhaps one of the most symbolic phrases of the president-elect's speech held after the elections ended. As analysts and politicians state, with Biden there will be a return to normality in the management of foreign policy, with the adoption of a softer line. According to what he says economist Michele Boldrin, the commercial disagreements with Huawei, ZTE and TikTok could be resolved with gentlemen's agreement in the order of billions of euros.
We must also consider that the Californian vice-president Kamala Harris ha strong links with Silicon Valley and this could be good for Huawei. Although the US and China are commercial rivals, companies like Google would be willing to return to trade freely with Huawei. given the amount of users lost otherwise. Hence the hypothesis that Huawei would always be banned and sanctioned in terms of connectivity (we talk about it at the end of the article), but free from a purely commercial point of view. This would benefit the many American companies that have seen an economic disadvantage in the US ban.
Huawei and Google together again… or maybe not?
Assuming that relations between the US and Huawei can soften with Joe Biden at the head of the government, doubts are raised about the software sector. Barring unforeseen surprises, if Huawei returns to be a partner of Google, it certainly won't do so in the short term. And in recent months the company has focused a lot on its ecosystem, mainly composed of Huawei Mobile Services ed AppGallery. Not to mention that HarmonyOS is around the corner: the first Betas they will arrive in a few weeks and in 2021 we will see i first smartphones which will mount it by default instead of Android.
In light of this, would it make sense for Huawei to give up what they did and retrace their steps? Maybe yes maybe no. Huawei may have prepared a plan B that provides for the return of Google on its devices, but it is not at all certain. Looking at the glass half full, this ban is considered an opportunity for Huawei to walk on their own steps, without having to rely on third parties. Sales will prove Huawei right or not, but the negative trend in Europe should not be underestimated.
The clash between Huawei and the US is by no means over
However, Joe Biden's arrival in the US presidency doesn't necessarily mean a positive outcome for Huawei. For example, in the summer of 2020 it was Biden himself a prohibit the use of TikTok to his campaign staff. The reasons given were Trump-I, that is security and privacy risks. In short, it seems that this fear has taken root in the USA in providing personal data to typically Asian platforms, as in the case of the creation of ByteDance. And it is something that can only make you smile, given that every day we feed mountains of data to a multitude of American apps, Facebook and Google in the first place.
Unlike Donald Trump's ultimatums, though, Joe Biden's administration feels like it is more willing to dialogue to understand how to stem the problem. During the election campaign, Joe Biden highlighted the China-related market issues raised by Trump, such as intellectual property theft and the difficulty in getting American companies into China.
"If we leave the way clear to Cona, it will continue to rob American companies of their intellectual property. It will also continue to use subsidies to give its state-owned enterprises an unfair advantage."(taken from Foreign Affairs)
But he also remarked how Trump had the wrong method of approach, considered too aggressive and focused on the wrong arguments. According to the new president, The US and China will only benefit if they cooperate, seeing Chinese growth as an opportunity for the United States.
"The most effective way will be build a united front of allies and partners to address China's abusive behavior and human rights violations. We will have to seek to cooperate with Beijing on issues where our interests converge, such as climate change and global health security. Alone, the United States accounts for about a quarter of global GDP. When we join other democracies, our strength has more than doubled. China cannot afford to ignore more than half of the global economy. "
It is unlikely that we will return to a period of relaxation as it could have been during the Obama administration. Also complicit in these tense years, it is clear how the American population is increasingly skeptical of Chinese companies. This is a rather relevant parameter that the government will certainly have to take into account.
There is also who does this as, contrary to what happened in 2016 with the election of Trump, the president Xi Jinping did not make himself heard for the customary compliments to the newly elected Biden. Could it be a sign of implicit disapproval or just a mere coincidence?
A big problem to be solved is that of 5G
Furthermore, in 2021 there is a topic that was not there in the Obama years and it is the one related to 5G. The new generation networks have opened the doors to new economic / political debates, being a powerful yet delicate standard. Until a few years ago, the intervention of Huawei and ZTE was certainly given as the cornerstones of the construction of the 5G infrastructure in the world, but today this is no longer the case. Especially in Europe, the only western area where Chinese companies manage to have some commercial influence.
Following the decisions of the Trump government, allied nations such as Italy, UK, Germany, Sweden e Portugal have decided to cut (partially or not) relations with Huawei. And Europe itself could be a focal point in the development of relations between the US and China. The intentions would be those of create a US / Europe front to counter Chinese technological domination, forcing the Beijing government to compromise. We just have to wait until 2021, the year in which the Biden government will actually take shape, to understand and analyze the next developments.⭐️ Discover the best deals online thanks to our exclusive Telegram channel.