Asian markets have slowly started on their way up on Monday. This happened after the news about a potential respite for Huawei came out. Wall Street saw some gains as well. South Korea’s Kospi (KOSPI) and Hong Kong’s Hang Seng (HSI) increased by about 1.3% each. The Shanghai Composite (SHCOMP) saw a rise of 0.7%. Japan markets, on the other hand, were closed for a holiday. Chipmakers and related companies saw an increase after US Commerce Secretary, Wilbur Ross, mentioned that a license is being worked out right now which would allow US companies to sell to Huawei. So far, the office has gotten about 260 requests for these licenses.
While the American companies were not allowed to supply to Huawei, others across the world would have seen a great profit if the Chinese giant decided to increase their production. With the licenses expected to be released soon, this brings some respite to the American manufacturers. On this news, South Korean company Samsung saw an increase of 1.8% while SK Hynix was up 2%.
Huawei and the US
The US government accused Huawei of spying on them for the Chinese government. Following this, a ban was imposed on the company, which meant that it could not deal with any American company, either for services like Google or for hardware supplies. While many were of the opinion that this result of the US-China trade war would end up with the company facing huge losses, the company, in fact, saw a great increase in sales. However, the US has appealed to its European allies to support its stance against Huawei. With Europe being a major and most important market, it could stand to lose a lot.
The Huawei Mate 30 was released post the US ban. This meant that the latest smartphone by Huawei will not support any Google services, such as Google Maps, Google Play Store, Gmail, or others. The phone is also designed to run on an open-source version of Android. With Google unable to license its apps and services to the company, Huawei phones will no longer be able to support Google apps. The Chinese consumer electronics giant has decided to go ahead with its production plans for now. Meanwhile, they are also in talks with the US government.
Progress and Discussions
Huawei is the world’s largest telecommunications company and one of the top smartphone brand. Unfortunately, it is also the one that has gotten caught up in the trade war between these two countries. The countries already have a preliminary commerce settlement in place. According to Ross, the licenses would allow the companies to get involved in trade with Huawei. This brought some hope for these US manufacturers. He also said that “the USA is engaged in a lengthy overdue overhaul of its commerce relationship with China.” A preliminary “phase one” agreement is expected to come later this month. The US Commerce Secretary has also said that both the sides were working out the issue and making good progress with the same.