China Prepares To Place Restrictions On US Trades as Tensions Intensify

| May 31, 2019
China Prepares To Place Restrictions On US Trades as Tensions Intensify

Trade tensions between China and the US look to intensify as China prepares a response to the America-Huawei business ban.

Bloomberg reports that China has drawn up a plan to restrict exports of rare earth minerals to the US, while also setting up its own “unreliable entities” blacklist for potentially untrustworthy foreign companies. The rare earth export restriction comes off as a warning, with officials indicating that they are willing to deploy it if the trade war between the countries deepens. China has a monopoly on several rare earth minerals, and US companies would take a major resource hit if their purchase was restricted.

The proposed Chinese blacklist mirrors the US Bureau of Industry and Security’s Entity List that Huawei has been placed on. China has already banned business with several American companies without a list, so this seems like a very direct response.

Meanwhile, Huawei, the company that this whole kerfuffle started over, is losing even more of its business from Japan’s SoftBank. SoftBank has announced it will be building its 5G network with equipment from Nokia and Ericsson, snubbing Huawei, which had been a 4G supplier for the large mobile carrier. There haven’t been any problems with the quality of Huawei’s networking equipment, but concerns about its security vulnerabilities and the company’s relationship with the Chinese government have led its customers to keep it at arm’s reach.

SoftBank is following the US’s example, and even the US and China halting the trade war would still leave its impact. Huawei’s reputation is crumbling, and it’s not getting better anytime soon.

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