The rising friction between the US and China is unlikely to end soon. The U.S. has been evicting prohibitions and limitations on Chinese institutions like a disease. This is troubling, though, that the Chinese government is not reciprocating. In a new article, Apple said it had 9 factories and 70 retail stores in China. The same can not be said about Huawei in the United States.
U.S. entities would not be allowed to negotiate or extend arrangements for businesses providing goods or services from Huawei, ZTE, Hangzhou Hikvision Digital Technology, Zhejiang Dahua Technology, and Hytera Communications. The latest rules, which come into effect on 13 August, would allow firms that offer federal contracts to guarantee that they will not use banned goods from the above listed Chinese companies.
The move is reported to affect more than 800 Japanese companies, including U.S. subsidiaries with direct federal contracts, as well as Japanese-based companies dealing with U.S. forces stationed in the Asian country.
This is uncertain whether the US government describes the “value” of goods. This is also a risk that the prohibition may eventually be expanded to include associates, branches, and parents of contractors.
Industries had two choices— either through the U.S. government or with big vendors. Thus far, it appears like businesses are willing to choose to do business in the United States.
Organizations such as Nippon Telegraph & Telecommunications, NTT Communications, SoftBank Group, and Kajima have announced that they would maintain consistency with this latest legislation and would withdraw from utilizing goods and services such as Huawei and ZTE.
The next in Donald Trump’s most recent ban on assault, the U.S. may block TikTok and WeChat. The prohibition on the latter, though, is not going well with American companies.
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Apart From Huawei, TikTok and WeChat Are Also in Process of Getting Banned
Although the ban on TikTok is clear and straight forward, the ban on WeChat has a number of consequences. WeChat is actually one of the only viable financial networks between the US and China. When you take WeChat down, you would literally be “burning” other Western businesses in China. Chinese firms in the U.S. have several payment choices. Nonetheless, American businesses in China still have WeChat as a feasible alternative.
More than a dozen American businesses are setting off the prohibition at a recent conference call with the White House. Critics argue that it hurts the profitability of US firms in China, the second-largest market in the world. The conference call features executives from Samsung, Toyota, Goldman Sachs, IBM, Morgan Slidan, Procter & Gamble, and other firms.