US tightens restrictions on suppliers to Huawei

US tightens restrictions on suppliers to Huawei

The Trump administration has announced a fresh set of sanctions against Huawei, making it even harder for the Chinese telecoms equipment maker to access the supplies it needs.

Wilbur Ross, US commerce secretary, announced on Monday that companies will have to obtain a licence before selling Huawei any microchip that has been made using US equipment or software.

Previously, companies were allowed to sell microchips freely to Huawei, even if those chips were made using US technology, as long as the chips had not been designed by Huawei’s in-house chip design company.

The expanded restrictions are the latest in a string of actions the Trump administration has unveiled over the past 15 months targeted at the Chinese company, which the US has accused of technology theft and sanctions busting. Washington also has also urged its allies not to buy Huawei kit, arguing it could be used to send citizens’ data back to Beijing.

They foreshadowed a wider set of actions targeted at China and its technology sector in particular. In the last few weeks, President Donald Trump has said he will ban US companies and individuals from undertaking financial transactions with two major Chinese tech champions: ByteDance, which owns the video sharing app TikTok, and WeChat, the messaging platform.

Huawei did not respond to a request to comment.

Mr Ross said on Monday: “As we have restricted its access to US technology, Huawei and its affiliates have worked through third parties to harness US technology in a manner that undermines US national security and foreign policy interests. This multipronged action demonstrates our continuing commitment to impede Huawei’s ability to do so.”

US officials have steadily ramped up the pressure on Huawei since placing it on the “entity list”, a move that forced US companies to apply for a licence before selling equipment to the Chinese company.

There were various exemptions to that regime, however, including a temporary waiver for any company supplying Huawei to help maintain existing networks of personal devices.

This waiver, which allowed Google to maintain its Android operating system on old Huawei handsets and enabled US companies to maintain Huawei equipment installed in domestic telecoms networks, finally expired on Friday. US officials said companies would now have to apply for licences to supply that equipment in future.

Officials also said on Monday they were tightening the rules to eliminate loopholes they claimed Huawei was trying to exploit.

Chip manufacturers will now have to apply for licences even if Huawei is not the end customer but still plays an intermediary role in the supply chain. This will stop Huawei being able to avoid the sanctions by selling their chips to be assembled by a third party, and then sold on from there.

The commerce department said it was also adding a further 38 entities to the sanctions list, in what officials said was an attempt to make sure they capture more Huawei affiliates.