While Huawei will be bruised by tech war, some Chinese suppliers could suffer a knock-out blow
- Small Chinese suppliers are worried that wider US-China trade standoff could result in lost orders and business going elsewhere
- The short to medium-term pain for many small-to-medium sized tech suppliers could be severe
Just half a year ago, Steve Liu was optimistic that the looming trade war between the US and China would come to a quick end. After all, he surmised that neither country’s economy could thrive without the other.
Today, Liu, a sales executive at a Shanghai-based company that manufactures accessories like wireless chargers, is much less upbeat about things. The US has imposed higher tariffs on Chinese goods, while Huawei Technologies, one of Liu’s customers, has been banned from buying American technology.
“The ban will definitely affect us because we provide accessories to certain Huawei smartphones, such as the Mate and P series,” said Liu, who asked that his company not be named because the issue is sensitive. “For now we have yet to feel the full brunt of the ban as we supply phones mostly in the domestic market, but if the situation [with the US] worsens it will negatively impact us for sure.”
The Huawei ban imposed last month forbids US companies like Google from providing critical services to Huawei following a temporary 90-day reprieve, and the move is expected to obliterate overseas demand for Huawei’s smartphones.
Since the US move, some panicked Huawei users have started selling their brand new P30 smartphones on e-commerce sites at hefty discounts, out of fear that a US ban on Huawei could render their handsets useless without essential Google apps. This is despite Google issuing a statement that existing Huawei devices will continue to have access to its services.