In an effort to reduce the trade surplus that many countries have with the USA, President Donald Trump has taken several steps, which include applying tariffs under sections 201 and 301 of the 1974 Trade Act. And the fact that the United States has its largest trade deficit with China has invited a trade war between the two countries. The trade war caused significant damage to Huawei as the USA had imposed a ban against the company last year.
To make the matter worse for Huawei, the US administration had extended the ban for yet another year. The US Government also banned TSMC, the world’s largest contract manufacturer of semiconductors, from serving Huawei and its affiliates throughout the world, thus making the future of Huawei’s chip business all the more uncertain.
And now according to Chinese state-run media Global Times, China is ready to take a series of countermeasures, which will include making it harder for major US companies such as Apple, Qualcomm to do business in its soil. China is now considering adding certain US companies to an “unreliable entity list.”
For both Qualcomm and Apple, China is a very important market. In the last quarter of 2019, Apple grew 6% YoY, thanks to the popularity of the iPhone 11 series. Qualcomm relies heavily on China to expand its 5G business.
“China will take forceful countermeasures to protect its own legitimate rights,” a source told Global Times. The measures might include adding related US companies to China’s “unreliable entity list,” imposing restrictions on or launching investigations into US companies like Qualcomm, Cisco, and Apple, according to the source.
Meanwhile, China hasn’t implemented the aforementioned countermeasures, but given the present situation, the Asian country might just go the extra mile by launching “rounds of endless investigations on certain American firms.”