Additional Huawei Restrictions On Hold Due to Pentagon Complaints

Additional Huawei Restrictions On Hold Due to Pentagon Complaints
  • The US Commerce Department delayed the tougher Huawei regulations amid objections from the Pentagon
  • The Trump administration will meet next week to discuss the rule change
  • Some of the Senators have criticized the Commerce Department for not being more strict with Huawei

The U.S. Commerce Department has delayed the proposed restrictions to further limit sales to Huawei, due to rising concerns in the Defense Department that the rule could backfire.

The additional restrictions would close a gap that enabled tech companies like Intel and Micron to keep shipping chips, software and other products to Huawei despite the fact that there’s a ban that kept Huawei from purchasing some American products.

The Trump administration is expected to meet next week to discuss the issue, which could be restored, killed or rewritten.

The Department of Commerce spokesperson said it will make new announcements if there’s any progress regarding the rule change. Huawei and the Pentagon didn’t give comments on the matter.

Current rules keep the US authorities from accessing main foreign supply chains, increasing the frustration in the Chinese government and encouraging the U.S. authority to further reduce shipments to Huawei.

According to previous media reports, the Department of Commerce was considering expanding the rule that controls how much American content in an imported product gives the U.S. government authority to manage exports.

However, the current administration has blamed the Commerce Department for not being more rigorous with Huawei, and for its slow deployment of regulations to restrict exports of high technology to China.

Senators Tom Cotton, Ben Sasse and Marco Rubio, members of the Select Committee on Intelligence, reached out to Defense Secretary Mark Esper, requesting an explanation for the department’s reported complaints. They also voiced their concerns that the Pentagon is not properly evaluating the risks.

“Huawei is an arm of the Chinese Communist Party and should be treated as such. It is difficult to imagine that, at the height of the Cold War, the Department of Defense would condone American companies contracting with KGB subsidiaries because Moscow offered a discount”.

Huawei was blacklisted back in May, due to national security concerns. Placing the Chinese tech giant on the blacklist resulted in limited sales of American-made goods to Huawei.

By Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to Invezz. His passion has given him first hand experience of trading, while his writing means he understands the market forces and wider regulation.
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