Huawei has decided to relocate its research center from the US to Canada amid escalating tensions with the US government.

The decision to move the research center comes shortly after reports surfaced about the US government imposing stricter measures against the Chinese tech giant. Huawei has been in a precarious position with the US government for the past year, being regarded as a national security threat and facing efforts to curb its influence in the country. In response to these challenges, Huawei has now announced its plans to shift its US-based research activities to Canada.

Recently, Huawei’s founder and CEO Ren Zhengfei disclosed to the Globe & Mail about the relocation. He also mentioned the company’s intentions to produce mobile network equipment outside of Canada. As part of this strategy, Huawei is looking to establish new manufacturing facilities in Europe to start manufacturing 5G equipment. Ren emphasized that their operations in Europe are aimed at dispelling concerns raised by the US about the potential espionage use of Huawei’s high-speed wireless technologies by the Chinese government. Meanwhile, the US government is gearing up to impose further sanctions on Huawei, restricting the supply of US technology to the company.

During the interview, Ren shared that Huawei had invested $510 million in its US research center over the past year. The center has also downsized its workforce from 600 employees to only 250.