White House to close Huawei loopholes
According to a Reuters report, the White House is due to announce a tightening of restrictions on its bête noire, Shenzhen-based Huawei Technologies. These restrictions will expand current restrictions which aim to prevent Huawei obtaining electronics with US origins.
As trade tensions continue to escalate between the US and China, US President Donald Trump has focused many of his attacks on Chinese technology companies with a global reach, such as Huawei, TikTok and Tencent.
Trump has repeatedly claimed that Huawei threatens US national security and could be used as an earpiece by the Chinese government; accusations which Huawei has repeatedly denied.
In May 2019, Trump added Huawei (and other companies) to the ‘Entity List’, forbidding US companies from working with named Chinese companies without a license. This forced Huawei to stop working with valuable US partners such as Google, resulting in Huawei’s most recent range of smartphones to be released without key Google apps.
A year later, Trump imposed further sanctions on Huawei to prevent it using electronics developed or produced using US technology. This will end Huawei’s access to its high-end bespoke Kirin 9000 chipset, which is manufactured by TSMC using some US technology.
Now, the White House is reportedly tightening these sanctions further still. According to an exclusive Reuters report, 38 Huawei affiliates in 21 countries will be added to the Entity List, raising the total to 152 Huawei affiliates. The additional blacklisted entities include Huawei cloud subsidiaries in East Asia, Europe and South America.
The blacklist will include four addresses of Huawei assembly locations so that no companies will “unwittingly” ship electronics to the company.
“Huawei and its affiliates have worked through third parties to harness US technology in a manner that undermines US national security and foreign policy interests,” said Wilbur Ross, commerce secretary, in a statement to Reuters. “This multi-pronged action demonstrates our continuing commitment to impede Huawei’s ability to do so.”
Government sources told Huawei that the new sanctions will prevent alleged attempts by Huawei to circumvent US export restrictions. A separate new rule will state that all companies on the Entity List will require a license when a company like Huawei acts as “purchase, intermediate consignee, ultimate consignee, or end user”.
Additionally, the commerce department has confirmed that it will not extend a temporary general licence – which allowed Huawei to do some limited business with US companies – which expired last week. Although not intended for that purpose, the license allowed Google services to remain active and up-to-date (e.g. receiving security patches and software updates) on Huawei phones which were launched before May 2019. Google had previously said that Huawei phones released after May 2019 will soon show up as “uncertified” on Play Store apps.
In the worst possible scenario, users of older Huawei phones – such as the well-received P20, Mate 20 and P30 ranges – will be left vulnerable and unable to access further Google updates.
