China prepares to retaliate against Apple for US sanctions on Huawei

By

iPhone sales
Apple could be caught in the middle of the trade war between the U.S. and China.
Illustration: Cult of Mac

The Trump administration on Friday announced a new rule aimed at blocking Huawei from getting the processors it needs to make phones, networking equipment and more. The Chinese government reportedly threatened to retaliate against Apple and other American companies.

Further cracking down on Huawei

Starting last year, the U.S. government banned American tech companies from trading with Chinese ones, including Huawei. However, Huawei has been allowed to carry out some limited cooperation under a series of temporary licenses.

The previous rule blocked Intel and Qualcomm from selling chips to Huawei. A new restriction goes even further.

The Commerce Department’s Bureau of Industry and Security announced today a rule designed to “narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.” This bans companies anywhere in the world from selling processors to Chinese enterprises if the chips were designed or built using U.S. technology.

China warns Apple could pay the price

The Global Times, which is owned by China’s Communist Party, warned on Friday that American companies will face “countermeasures.”

Citing an unnamed source, the newspaper said, “The measures include adding related U.S. companies to China’s ‘unreliable entity list,’ imposing restrictions on or launching investigations into U.S. companies like Qualcomm, Cisco and Apple according to Chinese laws and regulations.”

China is an enormous market for iPhone, Mac and other products. Apple took in $9.5 billion from this country last quarter. That’s 16% of its total revenue.

Via Reuters