Huawei Faces Major Loses As Many Countries Cut Off Chinese Tech Company

China’s tussle with countries across the globe has only increased in the past few months and it is the Chinese companies that are bearing the brunt of the growing tensions, especially the tech company, Huawei. The latest U.S. sanctions announced in May affectively restrict companies from exporting technical key components to Huawei, rendering the company unable to build its planned 5G base stations and other equipment.

"Based on the current direct export rule that the US put on, I really think that Huawei's 5G equipment business is in grave danger," explained brokerage firm, Jefferies’ analyst Edison Lee.

"If the law doesn't change, and if the US-China tension does not de-escalate, then I think there's a big risk that Huawei will stop being able to provide 5G equipment,” he added.

In June, the U.S. Secretary of State Mike Pompeo had declared that "the tide is turning against Huawei as citizens around the world are waking up to the danger of the Chinese Communist Party's surveillance state."

But Huawei, like a majority of Chinese companies in the country, "categorically opposes" the latest U.S. sanction as it is "discriminatory."

"It will have a serious impact on a wide number of global industries" and damage "collaboration within the global semiconductor industry," Huawei said in a statement in May. "We expect that our business will inevitably be affected.”

As per recent reports, Prime Minister Boris Johnson is also planning to phase out Huawei 5G tech in Britain "as soon as this year."

India, which was already blaming China for the coronavirus pandemic, has witnessed a rise in anti-China sentiments after 20 Indian soldiers were killed by Chinese troops in border clashes in the Himalayas.

The Indian government has already banned many Chinese apps, including TikTok and Shein, and has been dicey about including Huawei equipment in the country's 5G network for quite some time now, as per Chaitanya Giri, an analyst with Indian foreign policy think tank Gateway House.

But given the current scenario where many are viewing the presence of Chinese apps and companies in India as a "threat to sovereignty and integrity,” it is highly possible that Huawei may get caught up in the ongoing tensions. Public sentiment has now "consolidated, that we are not going to use any of the Chinese equipment," said Giri.