Stocks of Huawei and its affiliates took a dive on Wednesday, reported TechCrunch, after the United States (U.S.) blacklist was revealed in a move that aims to prevent western allies from using Huawei equipment. The U.S. Department of Commerce revealed that it will place Huawei and its 70 affiliates to the ‘Entity List,' and essential U.S. trade blacklist.
Ready and willing to engage
The move will stop the telecom giant from buying parts and components from U.S. companies without first getting approval from Washington. Huawei told TechCrunch that it was “ready and willing to engage with the U.S. government and come up with effective measures to ensure product security.”
“Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger; instead, this will only serve to limit the U.S. to inferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deployment, and eventually harming the interests of U.S. companies and consumers,” Huawei said in the statement.
Contrary to US national security
The Department of Commerce, however, has alleged that Huawei is engaged in activities that are contrary to US national security or foreign policy interest. It was reported that the U.S. Justice Department unsealed an indictment in January of Huawei and some entities that said the company had conspired to provide prohibited financial services to Iran.
In the meantime, U.S. officials told Reuters the "decision would also make it difficult if not impossible for Huawei, the largest telecommunications equipment producer in the world, to sell some products because of its reliance on U.S. suppliers."
The controversial decision comes just days after Trump imposed new tariffs on Chinese goods amid what some are calling an escalating trade war.