Watch Now


US export controls to dam Huawei’s revenue

Chinese telecom giant’s CEO Ren Zhengfei expects his company to lose $30 billion in revenue in 2019, mostly due to Commerce’s Entity List and the U.S.-China trade war.

   The U.S. government’s recent placement of Huawei Technologies Co. Ltd. of China and its 68 overseas affiliates on the Commerce Department’s Entity List is expected to take a steep financial toll on the Chinese telecom company during 2019.
   According to various news outlets, the company’s founder and CEO Ren Zhengfei forecast the overall reduction in revenue for this year to be about $30 billion, mostly due to U.S. technology export restrictions and the ongoing trade dispute between China and the U.S. 
   Before the imposition of U.S. export controls, the Huawei chief executive expected an annual revenue of about $219 billion for 2019.   
   “We never thought that the U.S.’s determination to attack Huawei would be so strong,” Ren said in translated remarks from Monday at Huawei’s Shenzhen headquarters. “We cannot get components supply, cannot participate in many international organizations, cannot work closely with many universities, cannot use anything with U.S. components and cannot even establish connection with networks that use such components.”
   However, Ren added, “I don’t think this will stop us moving forward.”
   In mid-May, President Donald Trump issued an executive order aimed at preventing foreign companies from gaining access to certain U.S.-made technologies that could pose a threat to national security.
   The Commerce Department responded by adding Huawei Technologies Co. Ltd. and its affiliates to the Entity List, which is enforced by the Bureau of Industry and Security.
  The Entity List subjects U.S. exporters to specific export licensing requirements and prohibitions. Organizations or persons who violate U.S. export control rules — as defined under the Export Administration Regulations — are subject to criminal penalties and administrative sanctions.

Chris Gillis

Located in the Washington, D.C. area, Chris Gillis primarily reports on regulatory and legislative topics that impact cross-border trade. He joined American Shipper in 1994, shortly after graduating from Mount St. Mary’s College in Emmitsburg, Md., with a degree in international business and economics.