The Trump administration is starting to constrict the supply of Huawei to make handsets by not allowing access to U.S. technology which is needed to make them.
Last Monday, Trump stated on Fox News that any equipment sold by the Chinese telecom is meant to spy on America. So, we don't want it in the U.S. and added any country that gets their equipment. There will be no sharing of intelligence with them.
The Commerce Department will raise the gauntlet that prevents the Chinese telecom from getting any more American chip components.
Last year, as a measure to penalize the mobile phone maker, it initially stopped the selling of crucial components that they need. This involved hard moves like not accessing Google music and important smartphone services. In May, the restrictions were very tight with the White House stipulating all U.S. Technology companies not to sell or produce for the Chinese company, reported New York Times.
One Huawei executive remarked this month that they are losing their supply of processor chips used to make bestselling smartphones because of sanctions. As a result, making advance chips will be on the back burner soon.
According to the Commerce Department, in statement released on Monday, the restriction was inevitable as the Chinese Telecom avoided sanctions actively with third party technology. Now, the rules will include all American made equipment that will be not used to make chips or components by them.
In a press brief, Commerce Secretary Wilbur Ross told Fox Business, under the updated rules that will expressly prohibit any American software or American fabrication equipment that is under license to sell to Huawei. He stressed that the Chinese telecom has been taking advantage of these loop holes to get access to American tech, adding that the Chinese are notorious in conducting themselves in such a manner, cited St. Louis Post Dispatch.
The company is suspected as it is part of the rising tensions that both U.S. and China are getting in row over technology and security. Another victim of the distrust is TikTok and WeChat messaging which are China-based. Coming September, they will be banned in America.
Despite the accusations heaped on it, the Chinese telecom has not admitted it is part of Chinese espionage. Chinese officials have called out Washington using the ploy national security to shut down Chinese companies that are getting more than U.S. Tech companies, noted Financial Express.
Ross remarked the new rules are directed at enforcing what the U.S. wants, adding that it is not connective whatsoever to trade talks.
Elsa Kania of the Center for a New American Security said that she is concerned about technology and Sino-American relations that the sanctions on security threats by Chinese telecom is relevant. The actions taken to punish the company and other Chinese companies are harsh and are not clear at times.
She added if the move is meant to terminate Huawei and not accounting for the negative feedback that will affect American firms. Many tech firms will be hit and damaged because of going after the Chinese telecom.
Related article: U.S. Administration Limits China's Access to Chip Technology