Doing business under US sanctions: a Huawei success story
In many ways, Mobile World Congress (MWC) is the perfect way for Huawei to highlight its business and vast offerings. The whole event is a siloed extravaganza of diverse technologies with far too much on display to understand or fully hold in your head all at once.
It all comes together, however, if you build it out piece by piece. Traditional telecommunications services are the foundation – 5G is the advancer. From there you can spread out to the Internet of Things (IoT) and automation. On top of that, you have innovative cloud services and then, of course, AI – which has taken up a larger platform at MWC 2025.
AI is a feature of much of Huawei’s MWC showcases, deeply embedded in its telco solutions, powering its B2B IoT networks and also enabling more personalized experiences across its consumer and office hardware.
This division overseeing this, known as the Consumer Business Group or CGB to Huawei, is closely aligned with its global reputation. The success of its smartphones took Huawei to a new audience in 2018 and 2019. But it is also known as the segment that felt the US sanctions hardest: in 2021, the company recorded a 28.5% year-on-year decline in revenue. The next year saw a 69% year-on-year decrease in net profit. Without access to US software and silicon, Huawei phones lost their appeal in the West – almost dropping out of big markets, like the UK, overnight.
While that will have hurt, and no doubt caused some job losses, it didn’t land a killer blow. What’s more, it also hasn’t curtailed Huawei’s expanse in Europe. The company has returned to profitability, rather rapidly, with very impressive revenues for 2023 and 2024 – this includes the smartphone business, which is now very healthy. At a company event last year, Meng Wangzhou, Huawei’s chief financial officer, announced that it was no longer in “crisis mode”.
This has led some to suggest that the company is back from the dead, a hyperbolic sentiment that seems to tie too much of Huawei’s overall business fortunes with its consumer goods. While there was a significant hit from the sanctions on its revenues – and there still appears to be trouble here – Huawei sales remained strong domestically and in regions like the Middle East and parts of Europe.
For example, Huawei’s first foldable smartphone was launched before both the pandemic and the sanctions. But just before MWC the firm released a new three-way foldable device, where the screen is made up of three panels that fold up like a glass accordion. For a division that almost ‘killed’ its parent, the continued development is impressive, a testament to the company’s R&D.
Throughout MWC, each Huawei executive talked about the company’s approach to research and development and how it had enabled their division to flourish. From its new cloud storage products to its AI-enabled business tools, the firm is driving innovations across the board. However, it appears that this is also a siloed part of the Chinese giant, with teams split into short-term research and development (which is where its new products and services largely come from) and then long-term R&D – heavy theoretical and mathematical research (moonshot-R&D, if you will) conducted across the world in Huawei labs and various universities. According to its communication team, more than 50% of Huawei’s considerable workforce is in some form of research and development.
Huawei weathers growing trade wars
The sanctions came under the first administration of President Trump, with the White House claiming Huawei was a security risk. To date, there is no hard evidence for this. However, from there the UK imposed its own Huawei ban. This largely extended to removing Huawei hardware from UK telecoms infrastructure, but the National Cyber Security Centre (NCSC) also pointed to US sanctions – essentially claiming Huawei was less secure because it wouldn’t have US technologies and would need to rely on Chinese hardware.
In 2025, the second Trump administration’s sharp trade tariffs have rattled America’s allies and raised uncertainty across international markets. There is a sense that it’s also forcing the rest of the world to either look for new trade relations or rekindle unions that are broken.
US companies might start to feel the pinch in their financials as Trump 2.0 takes full effect. Trade sanctions hurt American companies too; Intel isn’t doing particularly well right now, having ended 2024 with a large cull (15% of its workforce) and the resignation of its CEO Pat Gelsinger. Both of those blows are intrinsically tied to its sluggish revenues and new restrictions that stop it from supplying chips to Huawei will add more difficulty.
For all the governments scrambling to respond to tariffs, and the companies concerned about their supply chains, a lesson can be found in Huawei’s approach to the initial US sanctions. There is a clear method of global business without US dollars, and it’s a fascinatingly simple strategy: diversification. Whether it be new business lines based on sound R&D or launching products and services in emerging markets and untapped regions (the Middle East, Africa, Poland) – Huawei is an example we might all need in these chaotic times.
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