01:09 GMT +308 December 2019
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    Attendees walk past a display for 5G services from Chinese technology firm Huawei at the PT Expo in Beijing, Thursday, Oct. 31, 2019

    Huawei Plans to Move US Research Centres to Canada Amid US Crackdown, Trade War on China

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    The news comes after Reuters reported on Friday that Washington was mulling further restrictions to block US components being shipped to the Chinese telecoms giant over what it calls 'threats to national security', as well as ban Huawei from buying and selling in US dollars.

    Huawei has taken further decisions to extricate itself from US-imposed restrictions after stating it plans to move its research centre from the US to Canada, as well as produce more network components outside of China, company founder and chief executive Ren Zhengfei said, according to reports. 

    Huawei's “centre for research and development will be moved out of the United States. And that will be relocated to Canada,” Ren said as quoted by Canada's Globe and Mail.

    Huawei's top official also said he would like to build more facilities across Europe for manufacturing 5G network equipment in the EU in a bid to allay US government fears and rumours that the company's IT products were a threat to national security.

    To date, Huawei has invested $510m on its US-based research facility, which has seen employment slashed from 600 to 250 there due to US president Donald Trump's trade war on China.

    The move could be seen by some as an olive branch to Canada following the arrest of Ren Zhengfei's daughter, Meng Wanzhou, at Vancouver International Airport at Washington's request over allegations she had conspired to "defraud multiple international institutions" to violate sanctions against Iran, Canadian courts said in 2018.

    The news comes after Washington blacklisted over 20 percent of Huawei's global research and development centres across the world in August, after naming eleven facilities across the US, UK and Italy in a list of 46 affiliates, stating that they could not trade without US approval.

    US Prepares to Flex Its Muscles in Trade War on China

    Ren Zhengfei's comments come as US officials are considering blocking Huawei from the US financial system by placing the Chinese company on the Treasury Department's Specially Designation Nationals (SDN) list, Reuters reported, citing three people familiar with the situation.

    The White House National Security Council has considered the plan, two people said, adding that it would make it 'virtually impossible' for Huawei to buy in US dollars.

    US officials have also drafted a memo on the matter, according to one person.

    Whilst Huawei and the US Treasury have not offered comments, the proposed ban would block one of the largest companies in the world from using US dollar. But doing so would pose significant risks and difficulties for the US government, as Huawei already has a massive customer base worldwide, reports said.

    "The larger an entity is, the harder it is for a U.S. Administration to foresee and prepare for the major effects, foreign and domestic, that placing it on the SDN list may cause" former US Treasury official Matthew Tuchband said as quoted by Reuters.

    But others were determined to push through the tough restrictions.

    "Given Huawei's relentless drive to dominate the 5G landscape, it is one of the most urgent national security threats facing the free world," Republican Congressman Michael Gallagher said, adding that "all options should be on the table in order to impose maximum pressure".

    The news also comes come after the US president decided to toughen his stance on Huawei in late November, where the Trump administration looked into amending the De Minimis Rule and direct Product Rule, allowing US authorities to forbid foreign firms using US technologies from selling products.

    The US placed the Chinese tech firm on an entities list in May, restricting Huawei, ZTE and 70 Chinese tech firms from conducting business with American companies. Washington has insisted that Ottowa block Huwei's participation in building Canada's 5G networks or lose access to US intelligence, as well as repeatedly accused Huawei of spying on governments for the Chinese government, which both Beijing and Huawei have consistently and strongly denied.

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    Tags:
    telecom market, US Treasury Department, US-China trade war, innovation, R&D, Huawei
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