New restrictions that require US chip manufacturers to apply for licences to sell their wares to Huawei have been condemned by the company and the Chinese government as a malicious act of suppression by the Trump administration.
Huawei has been on the US ‘non-entity’ list since 2019, a status which bans it from doing business with American tech firms on national security grounds.
The US has now extended the order for another 12 months despite never providing evidence to support its claims. Huawei has persistently denied any allegations of wrongdoing but a legal challenge against the ban failed in court earlier this year.
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US chip ruling
However the impact of the sanctions has not been absolute. The US Department of Commerce has issued licences for certain companies to continue trading but chipmakers have found ways to ensure their components are not classified as American-made.
Washington believes the expansion of the ruling to cover chips will close what it believes to be a “technical loophole” and will tighten its control.
Huawei’s restricted access to key technologies, such as Google apps and services, has hindered its attempts to become the world’s leading smartphone manufacturer. Measures that would affect its access to components would be a further barrier, while US chipmakers face losing valuable sources of revenue.
The US government has said the restrictions are not a blanket ban but give American authorities greater visibility and control through the licensing mechanism.
Chinese authorities have voiced their opposition to the ban, while state media has suggested Beijing could retaliate through sanctions and investigations against US tech firms.
“The US has utilized national power and used the so-called national security concern as an excuse, and abused export controls to continue to suppress some particular companies in other countries,” China’s commerce ministry said.
Speaking at Huawei’s Analyst Summit, Rotating CEO Guo Peng said recent developments would not only impact its business but other industries and US companies as well.
“In its relentless pursuit to tighten its stranglehold on our company, the US government has decided to proceed and completely ignore the concerns of many companies and industry associations,” he said in a strongly-worded statement.
“This decision was arbitrary and pernicious, and threatens to undermine the entire industry worldwide. This new rule will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries.
“It will also impact communications services for the more than 3 billion people who use Huawei products and services worldwide. To attack a leading company from another country, the US government has intentionally turned its back on the interests of Huawei's customers and consumers. This goes against the US government’s claim that it is motivated by network security.
“This decision by the US government does not just affect Huawei. It will have a serious impact on a wide number of global industries. In the long run, this will damage the trust and collaboration within the global semiconductor industry which many industries depend on, increasing conflict and loss within these industries.
“The US is leveraging its own technological strengths to crush companies outside its own borders. This will only serve to undermine the trust international companies place in US technology and supply chains. Ultimately, this will harm US interests.”
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