The US today moved to block global semiconductor companies from being able to ship to Huawei.
A new report from Reuters explains that the Trump administration announced export restrictions designed to cut off Chinese telecom-equipment maker Huawei from overseas suppliers, threatening to ignite a new round of US-China economic tensions.
“This announcement cuts off Huawei’s efforts to undermine US export controls,” the Commerce Department said in a statement. The department said it would “narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain US software and technology.”
The new rules will force foreign semiconductor manufacturers that use US technology to get a license from American officials before shipping products to Huawei. That’ll be a big blow to the Chinese tech giant, which needs semiconductors produced overseas for its smartphones and telecoms equipment.
The US commerce department said the restrictions were a response to Huawei and its semiconductor subsidiary HiSilicon skirting export controls introduced last year.
“This is not how a responsible global corporate citizen behaves,” said US Secretary of Commerce Wilbur Ross in a statement. “We must amend our rules exploited by Huawei and HiSilicon and prevent US technologies from enabling malign activities contrary to US national security and foreign policy interests.”
As per Reuters, the US will allow chips that are already in production to be shipped to Huawei or its affiliates within 120 days from Friday. However, the chipsets will have to be in production by Friday to be eligible under the rule.
The new rules will further escalate tensions between the US and China, which have risen dramatically since the coronavirus outbreak. Last week, President Trump threatened to “cut off the whole relationship” with China.
Huawei’s emergence as a 5G powerhouse and alleged connections to the Chinese government have placed it at the center of a trade war between the two superpowers.