Trump Administration Tightens Restrictions On Huawei Affiliates.

Donald Trump Huawei U.S USA China

The U.S. Commerce Department has moved to expand restrictions on Chinese telecom giant Huawei, further limiting the company’s access to chips made by firms using U.S. software or technology, in a move that continues to escalate the Trump administration’s crackdown on Chinese technology firms.

The Commerce Department said on Monday that it will expand restrictions it had first announced in May, which were aimed at preventing Huawei from accessing chips with U.S. technology without a special license.

The department is adding 38 Huawei affiliates in 21 countries to the U.S. government’s economic blacklist, raising the total to 152 such affiliates.

Secretary of State Mike Pompeo said that the new restrictions will prevent Huawei from “circumventing U.S. law” and added that Huawei has “continuously tried to evade” the U.S. restrictions that had been imposed in May.

After years of trading the number two spot with Apple, Huawei overtook Samsung in June to become the world’s biggest smartphone seller, analyst firm Canalys reported.

Apart from its smartphone business, Huawei has been a key manufacturer of network components used by telecom providers and was poised to be a key component manufacturer for 5G networks across the world.

Since then governments in the U.S., U.K.India and other countries have moved to block telcos from using Huawei’s components in their respective 5G networks.

CRUCIAL QUOTE

“On May 20, we issued an order that prevented American technology from being used in Huawei-designed chips. That led them to do some evasive measures. They were going through third parties,” Commerce Secretary Wilbur Ross told Fox Business. “The new rule makes it clear that any use of American software or American fabrication equipment to produce things for Huawei is banned and requires a license.”

KEY BACKGROUND

In June, the Federal Communications Commission had designated Huawei as a threat to U.S. national security, claiming the company has close ties to the Chinese government and its military. As a result of the order, U.S. telecom companies were barred from using the FCC’s $8.3 billion subsidy fund to purchase any equipment made by Huawei. In February, the U.S. Senate had voted unanimously to pass a bill that banned the purchase of telecom equipment from Chinese manufacturers like Huawei and included a $1 billion fund to help rural telecom providers “rip and replace” existing Huawei equipment. The bill was signed into law by Trump in March. As diplomatic and trade tensions between China and the U.S. have risen following the coronavirus pandemic, the Trump administration moved to target Chinese tech conglomerates including Tencent, ByteDance and ZTE. Last week, Trump signed an executive order asking ByteDance to divest the U.S. operations of its social platform TikTok within 90 days.

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