Commerce Department Targets Huawei, Puts New Restrictions On Chinese Company

Daniel Leal-Olivas/AFP via Getty Images

Varun Hukeri General Assignment & Analysis Reporter
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The Trump administration moved Friday to block Huawei Technologies from accessing American semiconductor equipment, which is used to make smartphones and other devices.

A memo released by the Department of Commerce stated that under the new change to its export and licensing rules, suppliers that use American semiconductors would need to obtain a license before selling to Huawei, Reuters reports. Nearly half of the world’s semiconductor equipment is produced in the United States, so this move would dramatically limit the Chinese tech giant’s supply.

The Trump administration made a similar move in March when it blocked Huawei’s access to American-made computer chips, and the Commerce Department has made it a priority to fight “Huawei’s efforts to undermine U.S. export controls.” (RELATED: Report Reveals Role Huawei Had In Transporting US Tech To Iran)

Huawei has come under scrutiny due to a lack of transparency regarding its ties to the Communist Party of China and the Chinese government. Leaked reports have shown connections between Huawei’s corporate leadership and Chinese intelligence agencies, the People’s Liberation Army, and Communist Party-led trade organizations. As a result, Huawei’s involvement in American telecommunications has been considered a national security threat.

Chinese President Xi Jinping (L) is shown around the offices of Chinese tech firm Huawei technologies by its President Ren Zhengfei in London during his state visit on October 21, 2015. AFP PHOTO / POOL / Matthew Lloyd (Photo credit should read MATTHEW LLOYD/AFP via Getty Images)

Chinese President Xi Jinping (L) with Huawei CEO Ren Zhengfei (R) (Matthew Lloyd/AFP via Getty Images)

During a press conference March 31, Huawei Chairman Eric Xu claimed that “the Chinese government will not just stand by and watch Huawei be slaughtered on the chopping board.” His statement suggests that the Chinese government does in fact have an interest in the company’s success. The Global Times, a Chinese state-backed newspaper, also said Friday that China was ready to retaliate.

Secretary of Commerce Wilbur Ross also expressed his concern about the Chinese tech giant, stating that “there has been a very highly technical loophole through which Huawei has been able, in effect, to use U.S. technology with foreign fab producers.”

The federal government continues to take action on multiple fronts to address what has become a battle for technological superiority between the United States and China.