Huawei, the embattled Chinese technology giant, is slashing its sales expectations for this year by around $25 billion as the Trump administration’s clampdown on the firm takes a bite out of its business.
Speaking at an event on Monday at Huawei’s headquarters in the Chinese city of Shenzhen, the company’s chief executive, Ren Zhengfei, said he expected annual revenue to come in at about $100 billion both this year and next before recovering in 2021.
Last year, Huawei took in more than $105 billion in sales, helped by its fast-growing smartphone business. Mr. Ren said in January that he predicted another bumper year in 2019, with sales jumping to $125 billion.
But that was before the United States last month cut Huawei off from the American chips, software and other parts that go into its handsets and telecommunication equipment, saying that the firm represented a threat to national security. American officials have long said that Huawei’s products could be used by Beijing to disrupt or sabotage digital communications, charges that the company vehemently rejects.
Washington has taken its case against the Chinese giant to many of its allies overseas, leading governments around the world to reconsider whether the firm should be allowed to build next-generation 5G telecom infrastructure.
The company, one of China’s proudest corporate champions, has become a focal point in the fierce conflict that has engulfed the world’s two largest economies. Washington handed down the restrictions on American firms’ dealings with Huawei after Chinese and American negotiators failed in early May to reach an agreement to end their yearlong tariff war.
The Trump administration had already inflamed tensions with China late last year by arranging the arrest in Canada of Mr. Ren’s daughter and Huawei’s chief financial officer, Meng Wanzhou, as part of a criminal case against her and the company related to American allegations of theft of industrial secrets and violations of sanctions against Iran. Huawei has denied wrongdoing.