The commercial tension between the United States and China seems to intensify soon, since the latter country is taking measures to respond to the US ban on doing business with Huawei. Bloomberg reports that China has started preparations to restrict exports of rare earth minerals to the US. UU., At the same time it establishes its own blacklist of "unreliable entities" for unfavorable foreign companies. At the same time, SoftBank of Japan announced that it will build its 5G network with Nokia and Ericsson equipment, which rejected Huawei, which had been a 4G provider for the large mobile operator.
The restriction on the export of rare earths seems to be an act of saber noise for now. The leadership in Beijing is signaling that it is ready and willing to implement this severe measure, but, according to Bloomberg, that is only in case the trade war between China and the United States deepens. Neodymium is one of the most recognizable rare earths, since it is widely used in magnets. You will have seen it announced on the specification sheet of your hearing aids, and there is a broad consensus among economists and international trade observers that US companies have a high level of compliance. UU They do not have good alternative sources outside of China.
As for the Chinese list of entities, this reflects the language of the list of entities of the US Bureau of Industry and Security. UU in which Huawei is now. That may well be a deliberate sign of a tit-for-tat response, since China does not really need a formal list, since it has imposed bans on a number of prominent US companies such as Google and Facebook. The list will cover "foreign companies, organizations and individuals who do not obey market rules, violate contracts and block, cut off supply for non-commercial reasons or seriously damage the legitimate interests of Chinese companies," according to China National Radio, citing a government official. In simple terms, China is reflecting the actions of the United States and adopting a more assertive stance while addressing its next round of negotiations.
Huawei, the company that is at the center of the friction in the present commercial dispute, has taken a significant loss in SoftBank's 5G business form. Rarely have there been disputes over the performance of the Huawei network team, however, concerns about its security vulnerabilities and the company's relationship with the Chinese government have been affecting the minds of its commercial customers. SoftBank's decision now is probably a mix of that record and the current turbulence caused by the Huawei blacklist in the United States. This is one of those consequences that will have a prolonged impact no matter how soon the commercial relations between the United States and China improve. Even if the current impasse is resolved quickly, Huawei's reputation as a reliable manufacturer of smartphones for consumers and a reliable 5G provider for mobile operators will remain tarnished.