Home / Others / The US Huawei probe UU Increased trade tensions in China before the talks

The US Huawei probe UU Increased trade tensions in China before the talks



The news of a large US investigation of Huawei Technologies Co. on possible sanctions to the sanctions of Iran increase the tension on the commerce while high American civil servants go to China in the next days with the hope to arrive at an agreement.

EE. UU The Secretary of the Treasury, Steven Mnuchin, who hopes to be accompanied by the commercial representative of the United States, Robert Lighthizer, will arrive in Beijing in search of an agreement that prevents the US. impose tariffs on 150,000 million dollars in Chinese imports. China has promised to retaliate with tariffs on everything from US soya to airplanes.

Agents of the Federal Bureau of Investigation, supervised by the US Department of Justice. UU., They have been investigating the transactions of Huawei, the largest manufacturer of telecommunications equipment in China. according to two people familiar with the investigation. They are joined by the Office of Foreign Assets Control of the Treasury Department, or OFAC, which imposes sanctions, and the Department of Commerce, which are also investigating the transactions of the mobile and telecommunications giant of Shenzhen, China.

The Huawei criminal investigation stemmed from a previous investigation of violation of sanctions that eventually led to sanctions against another Chinese technology company, ZTE Corp., according to one of the people.

Some Huawei suppliers in Asia fell on Thursday after the news, with Chinasoft International Ltd. falling down to 21 percent and Sunny Optical Technology Group Co. falling about 10 percent.

Glenn Schloss, spokesperson for Huawei in Shenzhen, declined to comment on the probes The company has said it complies with all applicable laws and regulations where it operates, including export controls and US laws and regulations. UU., And that "actively cooperates" with government agencies regarding compliance.

ZTE Ban

Huawei's investigations also follow the action of the Department of Commerce of 19659016 ban ZTE, the second largest manufacturer of network equipment in China, to buy components manufactured in the USA. UU as punishment for violating a sanctions agreement for transactions with Iran and North Korea. 19659003] ZTE had previously reached an agreement with the Bureau of Industry and Security of the Department of Commerce, and pleaded guilty as part of a sanctions violation agreement with the Department of Justice. ZTE agreed to pay $ 892 million in fines and seizures in the Department of Justice's deal, at that time it was the largest criminal fine against a Chinese company, with additional fines if it did not comply with the agreement.

Wider ramifications

The search for irregularities by Huawei and a similar export ban on suppliers from the US. UU "would have broad ramifications on several vendors on a larger scale than the peer ZTE", according to Bloomberg Intelligence technology analysts Woo Jin Ho and Anand Srinivasan. "Chip providers such as Skyworks and Qorvo, each with a 10 percent sales exposure to Huawei, will be affected, and optical vendors, including NeoPhotonics, Oclaro and Lumentum, may also be exposed."

$ 500 million of 2027 notes from Huawei Technologies fell 1.3 cents per dollar to a record low of 93 cents in the early afternoon in Hong Kong, according to prices compiled by Bloomberg.

An explanation of QuickTake on Huawei

On Wednesday, the company lost a dollar planned the sale of bonds denominated and delayed the pricing of a European offer.

The Department of Commerce in 2016 issued an administrative subpoena addressed to Huawei seeking information about whether it sent American technology to dishonest nations such as Syria, Iran and North Korea.

Rival & # 39; F7 & # 39;

ZTE internal documents published on the Department of Commerce website cited an opponent, referred to only as "F7", as it also violated US export controls. UU In sales or equipment to Iran.

A group of Republican lawmakers lobbied the Trump administration last April to investigate and identify F7, citing press reports that have highlighted the similarities between the company described in the documents and Huawei. The FBI and OFAC investigations of Huawei have been going on since at least the beginning of 2017, according to one of the people with knowledge of the investigations, who asked not to be identified because she is not authorized to speak on the matter.

A spokesman for the Department of Justice declined to comment.

Separately, the US Federal Communications Commission. UU voted unanimously last week to prohibit federal funds from being used to buy network equipment from companies that are considered a national security risk. hit ZTE and Huawei. The measure has not yet been finalized. FCC chairman Ajit Pai cited the risk of "hidden backdoors" in our networks on routers, switches and other equipment "that could allow hostile foreign powers to inject viruses and other malware."

Without threat

Schloss, Huawei's spokesman, said those accusations are not true.

"We do not pose any threat to security in any country," he said. "US authorities should not base government decisions on speculation or rumors." In 30 years, not a single operator has experienced a safety problem with our equipment.

Huawei was founded in 1988 by former Chinese army engineer Ren Zhengfei, which raised congressional concerns about the Chinese army and the government's influence on the company. In addition to producing network equipment and other electronic products, it was the third largest smartphone vendor in the world last year behind Samsung Electronics Co. and Apple Inc.

Huawei has faced several setbacks in the United States this year. AT & T Inc. and Verizon Communications Inc., the largest US carriers. UU., They abandoned their plans to sell the latest Huawei smartphones. Then, consumer electronics retailer Best Buy Co. stopped selling Huawei smart phones, laptops and watches.

Huawei maintains research and development facilities in Texas, New Jersey, California and four other US states. UU technology for Huawei's global operations.

Despite the setbacks, Huawei said last month that net revenues for 2017 increased 28 percent and that growth in markets from the Middle East to Africa points to record sales of $ 102.2 billion this year . 19659003] – With the assistance of Greg Farrell, Beth Thomas and Lianting Tu

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