The Huawei ban is MUCH bigger than you think

One of the largest tech companies in the world is getting
blacklisted by the United States. On May 16th, Huawei was added to the Commerce Department’s Entity List, which restricts it from doing business with any US company without
explicit government approval. There’s a small carve-out for maintaining phones
that have already shipped, but basically, it means a de facto ban on US companies selling to Huawei. Google has already revoked
the company’s Android license, and Intel and Qualcomm are
considering similar moves. It’s part of a much bigger fight
between the US and China, and it goes a lot deeper than
what you’ve probably read. Your cellphone, your laptop, your air conditioner, your light bulbs, all of it was probably made in China. And if you’re in the US, it came by the same trade
route that’s now breaking down. But to realize why all that’s happening, you have to look at the big picture. (bright music) If you wanted to put a
date on the beginning of the modern electronics industry, 1980 would be a pretty good choice. It was the year of Apple’s IPO, the year that the
personal computer evolved from a nice hobby into a
mass-market consumer product. But, more importantly, it
was the year China created the Shenzhen Special Economic Zone, a space where Chinese
companies could trade in a free market backed up by the power of communist central planning. If the government wanted
experts to be cheaper, it could forcibly lower the exchange rate. If a bunch of houses were getting in the way of factory construction, they could just tear the houses down. Over the next 40 years,
that system built Shenzhen into the greatest manufacturing
hub the world’s ever seen at the same time that the tech
industry was coming into its own. Those 40 years gave us
the personal computer, the smartphone, and the quadcopter drone, with each generation of tech
relying a little bit more on the Trans-Pacific trade. It’s not that we wouldn’t have smartphones without China’s factory push, but they might look completely different and cost a lot more. Now, that system’s starting to break down, and it’s not just because of Huawei. We’re in the middle of
a really ugly trade war. In May, Trump announced a
plan to raise import taxes as high as 25 percent on laptops
and smartphones from China. Each new tariff from the US is met with more tariffs from China, which then triggers more
retaliation from the US. So far, the most damaging move from China has been a new
tax on soybean imports, which has left the prices plummeting and costs US farmers billions of dollars. We’re seeing executives arrested
and jailed on both sides, risking an unprecedented
collapse in trade. At first, Huawei’s problems were more about security than economics. Given how much Chinese
spying happens in the US, a lot of people in the
intelligence community are nervous about a Chinese company
operating American cell towers. But this latest move goes further, putting Huawei’s entire
cellphone business in jeopardy. Even the CEO admits it’s really hard to build a phone without US microchips. The big picture problem is that
building US goods in China just doesn’t seem like that
great of a deal anymore. In the ’80s and ’90s, leaders in both countries
saw outsourcing as a win-win. American consumers got cheaper goods, and Chinese workers got
lifted out of poverty and exposed to democratic
ideas at the same time. In the US, it was great
for microchip designers and tech shareholders
but bad for factory jobs, and it contributed a lot to the cratering of the middle class. On the Chinese side, those same factory jobs have
made the country a lot richer. More imports are coming in, so China has unwound a lot
of the currency manipulation that made exports so cheap to begin with. As a result, manufacturers
have started looking to India and Vietnam
for cheap factory labor. And Chinese tech companies
want to design phones instead of just assembling them. And they’re less reliant on
the US market than ever. So what does all that mean for Huawei? If the commerce order holds up and the US doesn’t grant any licenses, it means the company
may have to make a phone without any US components. That means no Gorilla Glass and no Micron flash
memory, among other parts. But all those parts have
foreign competitors, even if they’re more expensive
and not quite as good. Huawei doesn’t want to build
a phone without US parts, but they probably can if they have to. You can’t say the same
thing for US companies. If Apple had to build
an iPhone without China or even just stop selling
iPhones in the Chinese market, it would be a disaster for the company. Moving factories takes years, and it would plunge the
entire industry into chaos. There’s still time to avoid that, but there’s no sign of
either side backing down. And if we keep going, the US may have a lot
more to lose than China. Thanks for watching. If you want to know more about how this is affecting
gadget makers in the US, Ashley Carman has a great video about sort of what all
the tariff stuff means. And as always, like and subscribe.

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100 thoughts on “The Huawei ban is MUCH bigger than you think

  1. If US wants to play rough, China should play rough too and close the iPhone plant due to national security concern. Or they can close the US auto plants. I think the Auto plants is a better idea where US would lose more and less impact on China. China, go get tough on US!

  2. Nice to see that @the verge didn't show parts of India like Shaksgam Valley/karakoram tract, aksai Chin and Arunachal as part of China.

  3. The US has already lost. If you ever get laid off from a GOOD job in the USA just go take a look at any job board anywhere in the USA and you will see the prolific rise of the McJob service economy. Most Americans are tired of it, MOST people don't want to serve someone in a front line capacity and hear you complain about some trivial issue for 5 cents an hour at weird hours, thus, this political move is a reflection of the US people. And if you do find a GOOD job, count on it taking the better part of a year to get hired and 20-30 people competing for one opening. Now the new tout is that you have to find the "secret" job market by doing extreme networking, almost to the levels of a political campaign to find an opening for a GOOD job that is not listed on a job board, company website or LinkedIn so you are not up against 30 other people. If you start your own business let me know how you do finding LUCRATIVE contracts …. and not just McGigs.

  4. It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G, It's not about 5G…it's about 5G.

  5. Cree el ladrón que otros son de su misma condición!
    "The thief thinks that others are of his same condition!"

  6. I don't trust China and am in full agreement with any ban. They are thieves and liars. They have followed a long term strategy to dethrone the U.S. since Mao. We lifted the entire country out of poverty only to have them steal from us and now become a threat. I still remember when Nixon and Kissinger opened up trade with Chin to cure the stagflation we were experiencing.

  7. Everyone here wanted to keep bending the knee to china 🤦🏻‍♂️😂 This is a result of poor decisions from previous presidents who wanted to destroy USA from the inside.

  8. Yeha don’t worry about it… the US is backing up on their stupidity and Huawei is creating their own stuff

  9. Absolutely. What is point keeping your house open/unsecured after finding out that thieves are stealing your household goods?

  10. 1:05 The map shows Taiwan also counts in China……. but TAIWAN IS NOT A PART OF CHINA! We are a different country.

  11. Apple can make enough phones for the US in India. Huawei not using any US parts would be far more disastrous than Apple shifting US manufacturing to India, which it likely will if and when tariffs are imposed on phones. This presenter doesn't have all the facts.

  12. China is just starting and they are shaking USA. USA is out of ideas and options. They have become insecure of everything even to themselves

  13. The means of the American family, politicians, and capital predators is to deceive the American people and launch various wars, whether they are murder or immoral, they earn a lot of money, and they can consolidate control over the United States and the world.

  14. Donaludeen trump didn't realize china phone has already spread all over the world with a thousand kind of brand…

  15. USA : If you doing nothing wrong you shouldnt be afraid about Govt Spying.
    Me : USA if you doing nothing wrong you shouldnt be afraid about Huawei Spying.

  16. I LOVE MY PHONE but I love my country more. If the last 4 decades idiot's would have served Americans and not given our wealth away (not just Obama and the Clintons, Bush as well) then such a massive collection would not be needed. They did and IT IS! If needs be I can live in my beloved country and only upgrade my phone every few years instead of every year.

  17. oh I so much hope Iphone gets the next hit and has to stop all working with china. im not an Iphone fan so i would find it funny 🙂 and I think its sad to see a great phone making company get hit like this i love the phones Huawei make and was planning on getting one as my next phone but after this hmm yeah time will tell

  18. If china makes another facebook, google or operating system then I will definitely switch to them. I am bored getting spied by USA.

  19. apple market is gong down …us companies r scammers …extr price for everythig ..they can mke phones without yur components

  20. Why is america always act like a boss in this world? Could’t they just manage their own country and don’t disturb the other countries? Make peace in this world, don’t provoke war

  21. China bans Facebook,twitter, etc no one Care's….USA blocks one brands "USA is arrogant,trump is a fool "….and surely everyone spies

  22. American should stop using anything is made in China not just HUAWEI then! My apologies: NO offence to Local citizens, only to the US president!

  23. The answer is, we should have never put so much faith in a country and political system (out of greed on our part) whose philosophy is “The Ends Justify the Means”. It is very similar to the fossil fuel problem we had a few years back.

  24. I would do away with ALL the cellphones, laptops, 2G, 3G, 4G, 5G and 6G!
    Unfortunately, Pandora's Box has already been opened!

  25. This is a new cold war, is not a space race to the moon, but of whom implements the 5G network firts, and China with Huawei is way ahead, that is why Trump is trying to delay them.

  26. When America is so afraid of someone spying them but FBI or even someone else is spying on you maybe even now

  27. Just pull out all Made in China products from America. Bye bye everything, high unemployment 😂 there goes all plushies from Vegas 😢

  28. people wake up, the US gov can easily make a law without your permission, do you guys have voted for this law at all? now, this makes cost you a lot more to buy stuff from anywhere. how could you still afford? Tump will give you money? no, he will just leave without any hard to himself except a bad name. but what this mean to you guys?

  29. CEO arrested on both sides? We only know Meng wan Zhou was arrest in Canada, who’s arrest on the other side?

  30. This is a contest between China and the United States in the field of high-end technology.
    It really has nothing to do with smartphones.
    This is the big picture.

  31. Fun fact. Trumph sayd that device crrated in China with AMERICAN operating system spying. So why just Huawei is banned? Almost 90% of electronic devices are created in China, so they can be used to spying🤔

  32. No mention of intellectual knowledge transfer required to sell in China?!?

    Minus one on journalism cred.

  33. Do you think that the US government don't know as much as you know about how much Apple would lose out of trade war?

  34. Youbeepbeepr peepbeepis irritating andbeepmakesbeepbongit habongrdbeepbongto underbeepbeep stbeepbongand yobeepurbeepmessabeepbongagebong.

  35. This is a contest between China and the United States in the field of high-end technology and the Trump doesnt like to admit that they already lost with Chinas 5g technology.

  36. This situation is much deeper than that. It's connected to the spying chips installed on supermicro products without supermicro's knowledge. It's connected to China's policy toward Taiwan. It's connected to China's aggressive moves into the south china sea. It has everything to do with China now being seen as a threat by not just the US, but by many countries in Asia and elsewhere else.

  37. I got news for ya, buddy. Life is possible in a world without iPhones, video games and tablets. There's nothing Huawei makes that anybody here needs to survive. Ditto Apple, LG, etc. What would be really great is a return to the days when practically everything we bought worked right out of the box. A washing machine might cost us more, but we wouldn't have to replace it every four years. There are three KitchenAid mixers in our family. Two are less than four years old and I've had to practically rebuild them both twice. One is forty or more years old, and its paint is starting wear a little thin.


  39. Just remember that American companies can move to India for manufacturing as it is a win win situation

  40. US transferred all their factories together with the Technologies in China US helped them to be where they are now

  41. China is not your friend, it is one of the biggest country that violate human rights. They should be banned in every countries around the world. If you don't believe me just search in the internet for: china + human right violations

  42. The biger is Huawei. the more worry the whole world becomes because the big brother is keep on getting bigger and stronger.

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