Huawei has recently found itself caught in the crossfire of a trade war between the US and China.
However, the US feud with Huawei has much deeper roots, stretching back nearly 20 years.
This is the journey that has led to the United States placing Huawei on its Entity List, which prohibits companies from conducting business with Huawei without special authorisation from the US government.
Entering the US market
Huawei was founded by Ren Zhengfei in 1987, but it didn’t enter the US market until 2001, when China joined the World Trade Organisation (WTO).
Its first major controversy took place in 2003, when Cisco accused Huawei of stealing source code from its routers – an act which Huawei admitted to. However, Cisco dropped the case after settling the matter out of court.
In 2007, Huawei bid for 16.5% ownership of US tech company 3COM. Huawei had previously worked with the company to make routers and switches.
However, US lawmakers pushed for the deal to be blocked, claiming that Huawei was not transparent enough about its operations. A year later, the deal was successfully blocked by the US government, citing security concerns as the reason for this decision.
The FBI also interviewed Ren in 2007 as part of an investigation into Huawei’s alleged violations of trade sanctions against Iran.
The first half of the 2010s saw Huawei involved in various new conflicts and disagreements with US companies and authorities, including accusations of corporate espionage by Motorola.
In 2011, Huawei built a 200,000 square foot research facility in Silicon Valley with the goal of expanding deeper into the US. However, further attempts by Huawei to bid for network development opportunities in the US were still blocked by the government.
In 2012, the US released the results of an 11-month investigation which claimed that both Huawei and ZTE could not be trusted when it comes to network equipment. Included in this report were allegations that Huawei was sending data transmitted through this equipment back to China.
Allegations of malfeasance were not all directed at Huawei, however, with US authorities and companies also being accused of poor behaviour.
- In 2014, leaks by Edward Snowden included information about Operation Shotgiant – an allegedly successful US plan to hack Huawei servers and spy on the company using the compromised equipment.
- In 2016, T-Mobile was accused of using Huawei 4G patents without paying for them, with Huawei demanding no payment as part of these accusations. The company just wanted acknowledgement that their patents were legitimate.
- Samsung was sued by Huawei for using 11 “standard-essential” patents owned by Huawei.
The United States’ big play
In 2018, a number of US mobile carriers dropped Huawei smartphones from their offerings, including Verizon Wireless, which stopped selling all Huawei smartphones.
This was followed by six different US intelligence agencies warning against the use of Huawei products.
Then, towards the end of 2018, Huawei CFO Meng Wanzhou was arrested in Canada at the request of the US government. Meng is currently under house arrest.
In 2019, the US charged Huawei with 13 crimes including bank fraud and dealing with Iran. As a result of the increased tension between the US and Huawei, founder Ren reappeared in the public spotlight, claiming that Huawei was ethically sound and not in cahoots with the Chinese government.
Most recently, on 15 May, Huawei was added to the US Entity List, which means that large US companies such as Google, Intel, Qualcomm and ARM must stop working with Huawei.
As of now, the ban has been lifted for 90 days, but the long-term prospects for the company’s operations in the United States are uncertain.
China has also fought back with its own “untrusted entity list,” which puts the operations of thousands of firms in jeopardy.