What just happened? The US ban on Huawei is starting to have an effect on the Chinese giant's bottom line. The company reported a 5.6 percent rise in profit last year, its smallest increase in three years, and warned that 2020 would be its most difficult year yet. Huawei also predicted that the Chinese government could hit back against the US.

In its annual report, Huawei revealed that its net profit for 2019 was 62.7 billion yuan (around $8.8 billion). The 5.6 percent YoY increase paled in comparison to the 25 percent jump from a year earlier, and was the smallest increase since 2016, reports Reuters. Its carrier business, meanwhile, saw its sales rise by just 3.8 percent.

Revenue for the year was up 19.1 percent to 858.8 billion yuan (about $121.billion). Growth for the first half of the year was at 23.2 percent, meaning sales declined throughout 2019, and things are expected to get worse in 2020.

"We will need to further adapt to the long-standing restrictions imposed by the Entity List, while also addressing the impact of the ongoing Covid-19 pandemic," said board chairman Liang Hua.

The Trump administration added Huawei to an entity list in May 2019, preventing it from doing business with US companies without a government license. As a result, new Huawei phones, including the Mate 30 series and P40, lack Google's suite of apps.

It was recently reported that the US government could exacerbate Huawei's problems by restricting the supply of chips, including those from TSMC, to the company. But the firm warned that such action would see retaliation from the Chinese government.

"The Chinese government will not just stand by and watch Huawei be slaughtered on the chopping board," said rotating chairman Eric Xu. "If the Chinese government followed through with countermeasures, the impact on the global industry would be astonishing. It's not only going to be one company, Huawei, that could be destroyed."

P40 image credit: Karlis Dambrans via Shutterstock