Question

Can you write in your own words a few paragraphs that desbribe how the trade relation between China and The United States has affected a specific company in the past or present?

Answer 1

This trade war has impacted many companies based in either US or China, and many other global companies as well that have high stakes in either of these countries. But let's consider a company that has been at the centre of this conflict - a telecom giant of China 'Huawei'.

An overview of Huawei:

Huawei was incorporated in 1987 by Ren Zhengfei who had served army in China. The company started from manufacturing of electronics components but later on entered into telecommunication network business as well. Today the company has global presence as far as the telecom industry is concerned, including in US.

Huawei operates telecom networks in the countries and sells millions of smartphones as well. The linkage of its CEO with the Chinese government due to his term in army of the country made people concerned about data privacy issues. Many allegations have been made in past well. In 2012, US Intelligence Agencies warned other companies that Huawei phones might have an application through which user data can be leaked. SInce then, other countries including UK also made such allegations.

With time, the restrictions were eased down. But in June last year, China instructed its agricultural companies to avoid US-made products. As a result of which, US Government also started intervening in the Huawei operations in the country and delayed several licenses that the company needed.

Later last year, Huawei's CFO was arrested as well in Canada on the basis of allegations of fraud. As per the allegations, Huawei had violated sanctions against Iran by misrepresenting a Huawei subsidiary as a separate company in order to evade sanctions.. The CFO was released on bail but was prosecuted later in US as well.

THis arrest not only aggravated the tensions between US and China but impacted the reputation of Huawei in other countries as well.