The Trump administration on Monday further tightened the screws against Chinese telecom giant Huawei by revising and expanding its trade blacklist restrictions to include 38 of the company’s global affiliates and make it harder for the company to obtain semiconductor chips from U.S. companies.
The details: The Commerce Department’s move builds on its action in May to restrict the sale of U.S. software to Huawei that the Chinese company could use to produce microchips necessary to run its telecom systems and smartphones.
The new rule will now expand those restrictions to cover chips not designed by Huawei, but that the company could use instead of its own technology.
“What in May was aimed squarely at Huawei’s indigenous chip design, the rule today amends that and attempts to capture Huawei backfilling its indigenously designed chips with chips from other manufacturers,” a Commerce official told reporters on a Monday morning.
Monday’s announcement comes as President Donald Trump escalates his attacks on China, going after apps TikTok and WeChat as well as telecom companies like Huawei and ZTE. The Commerce Department first added Huawei to its trade blacklist in May 2019.
What Trump officials are saying: Multiple Cabinet officials are touting these new restrictions, which come as Trump continues his campaign to persuade allied countries to exclude Huawei from their 5G wireless buildouts over concerns that Beijing’s government could use the telecom networks for espionage — an allegation Huawei disputes.
“Huawei and its foreign affiliates have extended their efforts to obtain advanced semiconductors developed or produced from U.S. software and technology in order to fulfill the policy objectives of the Chinese Communist Party,” Commerce Secretary Wilbur Ross said in a statement. “As we have restricted its access to U.S. technology, Huawei and its affiliates have worked through third parties to harness U.S. technology in a manner that undermines U.S. national security and foreign policy interests.”
Ross joined Fox Business early on Monday to discuss the expanded crackdown. “It’s really a question of closing loopholes,” Ross told Fox.
Trade adviser Peter Navarro joined CNBC to outline the restrictions.
Secretary of State Mike Pompeo tweeted that the U.S. “dealt a direct blow to Huawei and the repressive Chinese Communist Party by further limiting Huawei’s ability to acquire U.S. technology and compromise the integrity of the world’s networks and Americans’ private information.”
Huawei temporary license expires: Monday’s Commerce Department news release also noted that a temporary general license has now expired. That had allowed some limited exchanges between Huawei and U.S. companies, such as rural telecom companies that still use Huawei gear.
Huawei did not respond to a request for comment.
Congress now is trying to pull together hundreds of millions of dollars to help subsidize the removal of this equipment from U.S. networks. Only a few dozen small companies use it currently. Both Republican and Democratic lawmakers are aligned in seeking this subsidy funding and had weighed including it in the recent stalled coronavirus relief negotiations.