I wouldn't put it past the US government to be behind the China hardware hacking story, but even if it was, the blow may be devastating. The timing is too convenient. 1) China marketing its 5G technology around the world (its technology will be even more suspicious now).
2) Launching a humongous effort to develop an indigenous microchip industry (which faces many hurdles, money, lag vs competitors, Moore's law, but, perhaps most importantly, markets for its products). Markets for Chinese microchips will dry up.
3) Microsoft China was in the initial stages of testing a Huawei chip. If approved, it was believed that other potential clients would take it as a seal of approval, which would lead them to buy it. 4) Canada claiming they had the means to test Huawei products for safety.
5) China was launching VC funds to develop indigenous chip industry. whose funds will now dry up. 6) Questions the China-based supply chain at a time when Trump has been focusing on decoupling from China.
7) Politically, it takes away attention from Russia leading up to the elections and conclusion of the Mueller report, and puts attention on China as the real threat, a country which Trump can claim he has been tough on.
Either this is part of US government PsyOps, or Trump is the luckiest SOB in the world. But the blow to China will be long lasting. No doubt about that.
