Trump's Huawei ban jeopardizes reliability of U.S. cloud services

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Editor's Note: Li Zheng is an associate research fellow at the China Institutes of Contemporary International Relations, Institute of American Studies and the director of the American Security Center, Institute of American Studies. The article reflects the author's opinion, and not necessarily the views of CGTN.

U.S. President Donald Trump declared "national emergency" last week in a campaign to ban the sale of Huawei's equipment in the United States. Meanwhile, the U.S. Department of Commerce halted Huawei's ability to buy components and technology from American firms without the government's approval.

The measures will undoubtedly deepen technical disputes between China and the United States. As a result of the ban, many American companies have suspended business cooperation with Huawei. Google cut ties with Huawei, blocking the Chinese telecommunications firm's access to Android system updates.

This means that Huawei's users would not get official updates of the Android operating system and could not use many of Google's services. Although Huawei will take remedial and alternative measures, the ban is an innocent disaster for both Huawei and Google.

Trump's ban has raised a deeper question – whether the cloud services provided by American technology companies are still reliable and secure, as political intervention is likely to happen.

The protectionist president is used to viewing foreign rivalries as a threat to U.S. national security and the country's international competitiveness. Worse still, the U.S. government may even prohibit some foreign companies from entering the U.S. market, of which the ban on Huawei is a typical example.

Huawei Technologies Co.'s Balong 5000 chip for 5G devices is unveiled during an event in Beijing, China, January 24, 2019. /VCG Photo

The Trump administration seems to believe that political interference in normal cross-border transactions is a legitimate act. However, the intervention will exert a domino effect and may even jeopardize the survival of American high-tech companies.

In the past decades, American technology industry has undergone transformative changes. American technological firms are gradually shifting their businesses to the cloud for system maintenance and updates.

In this process, user data is of vital importance for technology companies. It is worth noting that Google provides services to Chinese manufacturers at very low prices. Many believe this is to get as much user data as possible.

Chinese mobile phone manufacturers and Google-like companies have thus formed a mutually beneficial relationship. Neither side has an intention of changing this model of cooperation where Chinese manufacturers design and manufacture high-quality, low-cost products for Google-like companies and promote Google services in developing countries.

A Huawei store in Beijing, May 20, 2019. /VCG Photo

While Chinese firms can focus on the manufacturing to improve the quality of the products at a cost-effective way, American companies can focus on the cloud services to make huge profits at very low promotion costs.

But this will change radically. Political intervention is one of the biggest risks for the cloud-service business model. It will create new obstacles for American companies in technical support and data transmission and interrupt the highly interconnected supply chain.

It is very likely that cloud-service companies in the United States will permanently lose some of their users, and it will be difficult to find alternative partners in the short term.

Trump's Huawei ban will negatively affect the reliability of the country's cloud services. The United States has consistently claimed to have the "most" open digital economic environment and that it supports the unconditional free flow of data.

The international community believed in the reliability of the U.S. cloud-service model. But now, the world needs to re-evaluate the role of political factors in U.S. businesses and the relationship with American technology giants.

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