Sanctions Against Chinese Telecom Giant Huawei
INTRODUCTION: Chinese telecom giant Huawei faced heat from the ongoing trade war between the US and China, as the company has been barred from seeking any patent relief in the domicile of the US. Macro Rubio, US senator for Florida has put forward an amendment in the proposed US Senate legislation for the purpose of disallowing companies from seeking any sort of relief in US patent courts. This step has drawn severe backlash from China and it can further escalate the ongoing trade war between the two countries. Huawei on their part had earlier told Verizon, a US-based company that it must pay licensing fees for more than 230 of the Chinese telecom's equipment makers patent and the amount sought is over $1 billion. There has been a long-standing patent issue between both entities. The action from the side of the US senator is also viewed as a counter-reply to Huawei's claim related to licensing fees. The united states have prepared a list of certain companies that will be on the watch list of the government in terms of their working and Huawei is the latest addition in the list.
REASONING BEHIND THE STEP: US government officials have said that Huawei is effectively an arm of the Chinese government and they are of the view China will use products of Huawei for the purpose of keeping an eye on US government officials and spying on US territory. Huawei has been termed as a threat to the national security of the US by officials and President Donald Trump has been seeking hard-line policies against Chinese entities. He has also signed an executive order which prevents US companies from using telecom equipment manufactured by companies which are deemed as serving threat to the national security. Huawei has challenged the order in the US court stating that such an order is Unconstitutional and the verdict as awaited from the court’s side.
US-CHINA TRADE WAR: The ongoing battle between both countries has been a long time coming. China on its part has been looking to reduce the dominance of US tech giants in the world market. They have effectively used their membership in the world trade organization (WTO) to raise their export business across the globe. For the purpose of countering China, the United States ramped up the tariffs on over $200 billion worth of Chinese imports to 25% from 10%. China retaliated with higher tariffs on a revised list of $60 billion worth of US products. Trade negations failed between both countries and due to which tension between both countries has further increased.
EFFECT ON HUAWEI: The Company has emerged as a central bone of contention in the intensified trade war between the US & China. With sanctions against Huawei, their expansion plan in the field of 5G networking has taken a hit considering the fact that the US being a huge telecom market. It is feared that the sanctions will also have ramifications against the global tech supply chain as the US might push for entry barriers against the company in different market zones of their territory.
Author: Amit Ranjan, New Law College, Bharati Vidyapeeth Deemed University, Legal Intern at Global Patent Filing. In case of any queries please contact/write back to us at firstname.lastname@example.org.