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Huawei Stocks Took A Dive After The US Blacklisted Huawei & Affiliates

The stocks of Huawei and its affiliates underwent a dive on Wednesday following the revealing of the United States blacklist. The U.S. blacklist was released in an attempt to stop western allies from making use of Huawei equipment. According to the U.S. Department of Commerce, it will be placing Huawei and its 70 affiliates to the ‘Entity List’ and the U.S. trade blacklist.

The move by the U.S. will stop Huawei from purchasing parts and components from U.S. companies without securing approval from Washington first. Huawei has said that it was ‘ready and willing to engage with the U.S. government and come up with effective measures to ensure product security.’

Huawei has further added that ‘restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger; instead, this will only serve to limit the U.S. to inferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deployment, and eventually harming the interests of U.S. companies and consumers.’

The Department of Commerce, on the other hand, has alleged that Huawei is taking part in activities that are a threat to the U.S. national security or foreign policy interest. It has also been reported that the US Justice Department has unsealed an indictment in January of Huawei and some entities that said that the company was conspiring to provide the banned financial services to Iran.

The U.S. officials have told Reuters that the ‘decision would also make it difficult if not impossible for Huawei, the largest telecommunications equipment producer in the world, to sell some products because of its reliance on U.S. suppliers.’ The decision has been made only days after imposing new tariffs on Chinese goods by Donald Trump. The imposing of the new tariff has been termed as ‘escalating trade war’ by some. What do you think?

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