China Might Ban Some US Companies Among Others | Huawei Ban Retaliation?

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Updated on
11 May 2020

It has been a rough couple of week for Huawei, to put it very lightly. The US has come down hard on the Chinese manufacturer, claiming that Huawei works too closely with the Chinese government to be trusted by the United States. Just before the Huawei ban was official, China has issued a statement claiming that the ban might cost up to 11 billion in review for the US, in a move to convince the US to not go ahead with the ban. But the US was in no mood to listen and stroke the ban hammer on Huawei.

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Now, in a vague warning, on Friday, China has said that it was in the process of drawing up a list of “unreliable” foreign companies, organizations and individuals for targeting. In a normal situation, this might not be a big deal. But given the current situation between China and the US, this cannot be taken lightly. China might probably be looking to retaliate for banning the Chinese Technology Power House Huawei.

Following the US Sanctions banning Huawei and escalating tensions between Huawei and China, we are slowly but steadily marching towards a potential trade war.

“We think it may be the beginning of Beijing’s attempt to roll out a retaliatory framework,” said Paul Triolo of the global risk assessment firm Eurasia Group. “That could include a number of other elements, such as restrictions on rare earth shipments”, he added. This includes minerals that are crucial in making many mobile devices and also electric cars made by US companies.

In what seemed to be an apparent response, a China’s commerce ministry spokesman said on Friday in Beijing that it was establishing a list of foreign enterprises, organizations, and individuals deemed to be “unreliable entities.” How do they define “unreliable”?

Entities are unreliable if they fail to comply with market rules, break from the spirit of contracts and block or stop supplying Chinese enterprise for non-commercial reasons, seriously damaging the legitimate rights and interests of Chinese enterprises,” ministry spokesman Gao Feng told on Friday. Gao also added “necessary measures” against these unrelaible entities would be announced “in the near future.”

That sounds very much like the beginning of a trade war which is not good for anyone. What is your take about this whole situation? Let us know in the comments below!

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