The stage is all set for an epic showdown between the United States and China as China is preparing to strike back at the US over Huawei. Donald Trump placed a ban on all American tech companies from doing business with Chinese giant Huawei. A move that will effectively cripple the company. The Chinese government is currently exploring all options to respond to the stiff ban placed on Huawei.
Bloomberg reports that China is all set to place restrictions on the exports of rare earth minerals to the United States. Also, China is also setting up its own list of unfavourable foreign companies to be blacklisted. In the meantime, Japanese giant Softbank has snubbed Huawei. It has announced plans to build its 5G networks with equipment from Nokia and Ericsson. You may recall that Huawei is the chief supplier for Softbank’s 4G network.
China set to respond to US ban on Huawei
Neodymium which is a major mineral and rare Earth resource is mainly used in the manufacture of magnets. This mineral is mostly found in China and Beijing is set to ban its exports to the US. Without this mineral, American tech companies will be severely handicapped in the production of speakers, earpiece, TVs, and anything that needs magnets to function.
However, if you buy a new headphone and you look at the specs, you’ll see that it’s made of Neodymium. Outside China, there are no good alternatives in acquiring this rare Earth. China has already imposed a ban on almost all American tech giants including Google, Facebook, Twitter, Pinterest, Wikipedia, YouTube, etc. If the company decides to go on with its plans, it will be adding more companies such as Apple and Microsoft to its long list of blacklisted American companies.
In the meantime, Huawei is the centre of a bitter trade war between both countries. Even if the whole issue is eventually settled, Huawei’s reputation will forever remain tarnished.