In a new report from Bloomberg, the U.S. Commerce Secretary, Wilbur Ross told the publication that the government plans to broaden its ban on Huawei.
Ross said the new policies are not aimed at cutting off China’s largest telco equipment maker, but rather to protect national security.
Huawei was banned in the U.S. last year on national security grounds. The ban restricted the companies that could be able to supply technology to Huawei, but some companies did find their way around it and continued with their business.
Ross said the government is looking into the export control mechanisms after some U.S companies continued to supply Huawei after the ban. The original restrictions permitted any U.S. based company to continue trading with Huawei as long as less than 25% of the technology stacked in a chip, for example, originates in the U.S.
Now, the organization wants to tighten these rules to apply to any technology equipment, which has 10% of its work done in the U.S.
People familiar with the matter told the publication that the new law is still under consideration by the Commerce Department and could go in effect in “a matter of weeks.”
During the China and U.S. Phase one trade negotiations, the Huawei ban wasn’t discussed, according to Ross. The next phase of the agreement – phase 2 – reportedly has no intention of debating over this matter.
However, China has continuously threatened to crack down on business that cut-off business with Huawei.
Industry players, on the other hand, have also warned the Trump administration of the counterproductive effect the ban will result since Huawei will likely buy the current equipment supplied by U.S. tech companies from non-U.S. technology companies.
They are also wary that the Chinese government may close its market to U.S. companies.
SOURCE: Bloomberg
