Huawei may soon find itself even more isolated in the global supply chain.
What you need to know
- Huawei may soon be the subject of additional attacks by the U.S. government.
- A plan to impose further restrictions on Huawei was previously curtailed due to opposition from the Pentagon.
- The Department of Defense is now reportedly walking back on its position, paving the way for additional measures against the company.
The battle between Huawei and the U.S. government continues. On the same day that the U.S. government claimed it had proof of Huawei illegally accessing backdoors in telecom equipment as far back as 2009, the Department of Defense is reportedly walking back on its opposition against further sanctions on the company.
The Commerce Department was set to impose further restrictions on Huawei’s suppliers last month. The move was aimed at further isolating the Chinese tech giant in the global supply chain, and to make it even more difficult for the company to procure the components it needs to make its products.
Those plans came to a grinding halt, however, when the Pentagon voiced its opposition to the proposal based on concerns among the business community that further moves against Huawei would simply make it even less reliant on U.S. technology and, therefore, make it that much harder to control. There were also concerns that pushing Huawei away would encourage foreign companies to seek alternatives, thereby eroding American semiconductor manufacturers’ ability to remain market leaders.
Politico now reports that the Defense Department has changed its mind, and is set to back the restrictions proposed by Wilbur Ross’ agency. The new rules would effectively work to outlaw some of the loopholes being used by some U.S. companies to continue supplying their products to Huawei.
Previous rules on export controls allowed goods whose origins were less than 25% based in the U.S. to be exported freely to Huawei. The new rules would bring that number down to 10%, severely hampering semiconductor companies’ ability to continue supplying Huawei.
In addition, officials from both departments are set to meet this week to discuss the rule, while a meeting between the Secretaries of the Commerce, Defense, and Treasury departments to go over the matter is set to take place on February 28.
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