Question

How Hauwei Might Handle the Latest US Sanctions

Author Name: Klint Finley

Publishing Date: June 21,2019

Publishing Platform: Wired

An article that I found extremely interesting was of a recent issue faced by a business in the United States named Huawei . Its a Chinese telecom hardware company. Huawei is China’s biggest phone maker and has recently been embroiled with the U.S. government concerning security threats. Huawei did business with many American corporations in the USA and provided cellular network gear to many companies in the USA. Yet, there was a security concern that China is using Huawei’s network for surveillance purposes.

That issue was quickly resolved after the U.S. government applied law and Constitution and banned all U.S. companies from doing business with Huawei keeping in mind the issue of national security. Using the provisions of the U.S. constitution, the government added Huawei to a list of companies that are considered a threat to U.S. national security. So Huawei is unable freely acquire U.S. technology and will have to seek U.S. government’s permission to do the same. The provisions of the Constitution with regards to national security have been used to put export restrictions on Huawei as well.

The US has been very concerned about some of these Chinese companies simply being trojan horses for China.

Another interesting area is mergers re international law, thanks for this post. Mergers are not as controversial as they used to be. My guess is that because so many companies compete globally now, we are not as concerned when they grow large!

Is that a good or bad development?

Answer 1

so while we are talking about china based Hauwei firm, known for his high growth rate in a very short span of time in US market, but due to some security-related issue imposed by US administration has badly affected the firm and not only Hauwei even many US-based firms are affected because of cutting down in supply from Hauwei thus due to all these many firms mainly Hauwei is moving through a critical situation where they don't have access to US market which is one of the most profitable markets for them as within a very short period they have started selling their componenets to many US based telicommunication comapany and developed a properous market for them but due to some security related issue they have debarred from doing business with any US organization, even after having great opportunities, but all these trade related issues always happen in the international trade and they are going on since years, so it's not only about Hauwei these have also occured in the past either between two nation or between two firms and sometime situtaion become more worse as we have in the case on Hauwei and US governmet thus to handle situtaion in which there is direct involvement of governent it becomes to difficlt for firm to handle it at the organization level rather it has to be handle by the government diplomats by negotiating at some common minimum agenda however in this case Hauwei can also take help from internationla organization who take care of all these international related issue but i think even after getting this issue resolved at international level this is not going to help them because US has their seprate own commerce department having broad authority to decide on specific companies export limits and taxes for their product thus by looking at the seriousness of the matter we can say negotiation at the government level from both the country is the only way through which they can have a entry into the US market again, otherwise it would be difficult task for them. we have seen in many cases that merger helps in making market more competitive by acquiring capital and sharing technology between the firm but it will only be helpful if we have the specific rules and regulations regarding it, otherwise, various companies may create cartel in the market and there is a chance that rather then having competitive nature and technological development which is beneficial for the consumer it may lead to quality degradation and a monopoly situation in the market thus there should always be an antitrust law along with a competition commission in the country which has to look on these mergers and acquisition, however, due to increase in the number of companies now market become more saturated and thus even merger has very minor effect on market thus we can say if the merger and acquisition have to be done in such a way that it should benefit the consumer.