Trade wars, like real ones, are very much easier to start than to stop. The decision by Google to withhold its software from future Huawei smartphones, even if it will continue to support those presently on the market, comes after considerable pressure from the US government. Even so, it is a move that all parties will regret.
The pain for Huawei is obvious. Although it has been stockpiling chips and, presumably, preparing other defences, there is nothing it can sell to consumers outside China that does not depend on American software, and little that does not depend on American chips. As much as half of its global market could disappear, and that is without counting the 5G networking equipment which was the proximate cause of this quarrel. The ultimate cause, of course, is the American fear of losing its position of global pre-eminence, and the Chinese determination to realise that fear.
For Google the cost may seem a lot less obvious. It was already excluded from the Chinese consumer market, and the sales of Android phones on which it increasingly depends are pretty much independent of manufacturer: consumers who might have bought a Huawei phone will simply buy from a rival phone company instead, perhaps even one of Google’s own branded ones. But in the medium and long term this decision will damage it greatly. Although its Android operating system is open-source, and can freely be used and adapted by anyone, Android on its own is almost unusable and Google controls completely the software layer above it that makes Android attractive and valuable to consumers. Maps, Mail, the search assistant, the app store and much more are all proprietary to Google, and companies which want to use them must sign agreements that they won’t build phones with a different operating system. This puts them entirely at the mercy of Google, which has now shown that it can’t be trusted. Under pressure from the US government, it will cut off access to everything that makes an Android phone saleable. What business would want to depend on such a partner?
Huawei is one of the few companies big enough that it could develop its own replacement for the whole Google ecosystem, and it has already had to do so for the Chinese market. But to produce something that could compete outside China will take years and may prove impossible.
Huawei is under attack as a representative of the Chinese state. That is why it is thought to be a dangerous partner in 5G networks, but that is also why it will probably be defended with the resources of the state as well. Britain has so far resisted pressure to exclude Huawei from its 5G networks, probably wisely. However the network is built, it will be dependent on hardware made and designed abroad; all of this will be tremendously complex and some will undoubtedly contain bugs. GCHQ has attempted to verify the security of Huawei’s equipment; the results were troubling but if the weaknesses it found were the result of malice, they were concealed beneath a thick layer of incompetence.
The tangled global webs of interdependence between hardware and software, China and the west, show very clearly how vulnerable both sides are to the other and how impossible it is for either to achieve technological autarchy, even if that were desirable. But this struggle is not really about technology at all. It is about dominance: who is to be the master. Whether it is China or the US that emerges the winner, both sides will suffer, and third parties such as the UK will perhaps suffer most.