On January 29th, the U.S. Attorney General Matthew Whitaker announced that he had filed a national security related criminal charge against Huawei. The U.S. Department of Justice accused Huawei of 23 "crimes", which can be summarized into two things. First, a grand jury indictment in Seattle accused two subsidiaries of Huawei of committing 10 federal crimes "stealing" information about the design of a robot called "Tappy" by T-Mobile. The second is an indictment from a grand jury in New York alleging that Huawei along with its chief financial officer, its Iranian subsidiary, and one of its subsidiaries in the United States committed another 13 crimes. The "crimes" alleged in this indictment can be traced back at least 10 years and involved the highest level of the company. The U.S. Department of Justice officials also said that the United States is currently seeking extradition of Meng Wanzhou and expressed gratitude to the Canadian government.

When the U.S. Department of Justice announced the matter, it was attended by the representatives from the U.S. Department of Homeland Security, the Federal Bureau of Investigation, the Department of Commerce, the Department of Justice, and various agencies of the New York Eastern District Attorney's Office. It should be emphasized that the U.S. Department of Justice's allegations against Huawei are criminal charges, which means that the nature of Huawei's problems in the United States are very serious. Once such accusations are approved by the court, Huawei will face severe penalty for the "crimes".

It is obvious that Huawei, which had been troubled by the arrest of Meng Wanzhou, has once again mired in an escalated and difficult situation. How then, will this impact Huawei and the upcoming U.S.-China trade negotiations? One thing is for sure: the uncertainty will obviously increase significantly.

First of all, judging from the macro impact of the incident, the United States has filed 23 judicial charges against Huawei, which is the terrible outcome for both Huawei and China. It is clear that the United States is using all its power to suppress Huawei on a global scale. This is a long-awaited judicial action for the United States, but on the political level, it is part of the U.S.'s strategic transformation to curb its long-term strategic competitors. Although the incident occurred within Trump's term of office, the U.S. has been seeking to crack down on Huawei for a long time coming. A large number of state machines have been mobilized to achieve this, hence this can be regarded as a national effort. This also shows that once the U.S. has determined its strategy to curb its long-term competitors, it will commit to advance and implement such a strategy. Therefore, China should not assume that it can take any chances in this matter.

Secondly, Huawei will face extremely difficult hardships. On the surface, this is a "war" between the world's foremost superpower against a Chinese company. It is quite clear that the position of the U.S. and its goals have been set. The U.S. is mobilizing its state power to suppress Huawei which not only directly excludes Huawei products from the U.S. market, but also rejects Huawei from being involved in the 5G technology. Furthermore, the U.S. has also persuaded its allies to create a scenario of the pitching West against Huawei. It can also be seen that Huawei will face a more severe investigation and assault from the U.S. than those faced by ZTE, as Huawei is more powerful than ZTE. The assault of the U.S. on ZTE is just a beginning, the attack on Huawei is the real show.

Thirdly, the accusations of the U.S. on Huawei will inevitably affect the U.S.-China trade negotiations. According to publicly available information, the Chinese Vice Premier Liu He has led a delegation to the U.S. for trade negotiations. This negotiation is extremely important for both China and the United States, though it is of greater significance to China. As the accusations happened just at the time of the Chinese delegation's negotiations in the United States, there is reason to believe that such an action by the U.S. government during such a sensitive period will have an impact on the Chinese delegation's negotiation strategy and related arrangements. If the Huawei incident is included in the negotiations, it means that this matter has increased the bargaining power of the U.S. in trade negotiations and it is possible that the U.S. will require China to make greater concessions. Once the Huawei incident enters the U.S. judicial system, this maybe not be necessarily used in trade matters and discussions. This means that even if China makes some concessions, the U.S. judicial system will not necessarily let Huawei get away that easy.

Fourthly, the high-profile accusation of the U.S. is a strong signal that it will use stronger and more diverse means to deal with China and Chinese companies in the future. At the beginning of last year, Anbound's Chief Researcher Chan Kung provided his analysis on market space wars in the era of globalization. He pointed out that there are six dimensions of market competition, namely: (1) gaining upper hand in technological and intellectual property, (2) the boundary of trade and consumption space and its guarantee, (3) political conflicts in ideology, culture and morality, (4) interest, security and risk control of currency and financial capital, (5) legal system, (6) market alliance and regional cooperation. These six competitive dimensions are likely to be transformed into ammunition against China in the hands of the U.S. In addition to these aspects, the issues of Hong Kong, Taiwan, state-owned enterprises and the Belt and Road Initiative may become means that can be used by the U.S. to deal with China.

Fifthly, the high-profile accusation of the U.S. has also exposed the weak side of the evidence. After a preliminary study of the U.S. extradition of the law of Meng Wanzhou, Anbound's researchers found that the U.S., which has always emphasized evidence and facts, may not have strong legal evidence. There are two points that have attracted the attention of Anbound's scholars: (1) These documents might be pieced together within a short span of time, and some might even be newer information. (2) The U.S. has made intellectual property disputes between enterprises into criminal lawsuits between countries. This is unacceptable and violates basic business principles. Based on such approach, almost all of the world's top 500 companies are not safe, because almost all of these companies have intellectual property disputes. This is especially true for Apple, as the mobile phone industry is full of intellectual property disputes between companies and mutual accusations. These legal issues show that under the urgency of the U.S. government to "take down" Huawei, it is willing to go to extremes with respect to legal charges. In this case, Huawei should have a lot of room for a legal response. The key is to see if Huawei's legal team has accurate judgments and whether they have the correct strategy.

Lastly, the accelerated pressures of the U.S. on Huawei once again prove that China's current and future external strategic environment is no longer a "strategic opportunity period", but a "strategic competition period". Due to the obvious gap between the strengths of the two countries, and under the continued pressures of the U.S., China is likely to experience a period of "strategic endurance" in various aspects. As far as U.S.-China relations are concerned, the U.S. understands that if it does not take the opportunity to suppress Huawei, it will be more difficult to do so when Huawei becomes an important global communication network infrastructure service provider in the 5G era.

The same is true at the level of national competition, but the outcome depends on the response of China. Anbound's chief researcher Chan Kung once pointed out that ZTE's incident was also an observational and mapping by the U.S. on its trade war against China. Tracking researches in the past reveal that when the U.S. and China were in dispute, politics and economics were separated. Even in trade negotiations, the U.S. Trade Representative Robert Lighthizer had to make a special statement that conveys the sense of "business is business". However, after the ZTE incident, the U.S. seemed to be no longer concerned about the separation of political and economic affairs. From the speeches of Mike Pence and Peter Navarro, it can be seen that the U.S. is now using political, administrative and economic means as w whole package simultaneously. From a strategic point of view, the ZTE incident has become a turning point for the U.S.

Final analysis conclusion:

The escalation of the accusations of the U.S. on Huawei is a signal that the U.S.'s suppression of China will be firm, continuous and escalated. The fields of trade, technology, intellectual property and financial systems are likely to become battlefields. However, Huawei and China are should not panic. The high-profile voice of the U.S. is also a cover for its anxiety and hidden weaknesses. This is an unprecedented game between China and the United States in the non-war situations, a game which is related to both economic interests and national fortune.