Huawei: China will hit back at new US trade restrictions

Chinese telecom giant Huawei on Tuesday warned the U.S. that renewing trade restrictions on the company could provoke a backlash from Beijing that could potentially damage the global industry.

Huawei Technologies Ltd., China's first global tech brand, is at the center of tensions with Washington over China's technology ambitions and possible spying that set off President Trump's tariff war with Beijing in 2018.

A woman wearing a mask against COVID-19 stands near an advertisement for Huawei mobile phones in Beijing. 

A woman wearing a mask against COVID-19 stands near an advertisement for Huawei mobile phones in Beijing.  (AP)

The company has denied U.S. accusations that it is controlled by the ruling Communist Party or facilitates Chinese spying. Chinese officials, meanwhile, have accused the Trump administration of abusing national security claims to restrain a rival to U.S. tech companies.

Speaking at a recent news conference in the Chinese city of Shenzhen, the company’s chairman Eric Xu said Beijing will not just stand by and watch Huawei be "slaughtered."

"If the Chinese government followed through with countermeasures, the impact on the global industry would be astonishing," Xu said. "It's not only going to be one company, Huawei, that could be destroyed."

Xu couldn't confirm reports that Trump might extend controls to block access to foreign-made products containing U.S. technology, but warned that such measures "will be destructive to the global technology ecosystem."

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Huawei had to spend heavily to replace American components in its products and find new suppliers after Trump on May 16 approved the sanctions that, if fully enforced, could cut off access to most U.S. components and technology. Washington has granted extensions for some products, but Huawei says it expects the barriers to be enforced.

Despite the restrictions, the company said 2019 handset sales rose 15 percent, to 240 million units. But demand for Huawei smartphones in markets outside China weakened "very fast" after the May 16 order, Xu said.

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He said its consumer unit lost at least an estimated $10 billion in potential sales, but the business started to bounce back in the final quarter of 2019. Still, Xu forecasted gloomy projections for 2020 as Huawei struggles with the sanctions and the coronavirus pandemic.

The Associated Press contributed to this report.