U.S. China Spat Leads to Further Sanctions on Huawei

The United States has increased the trade sanctions against Chinese telecoms giant Huawei. U.S. intelligence agencies have alleged that Huawei, the world’s largest telecommunications equipment manufacturer, could be an operative for Chinese security and intelligence services. Huawei faces trade theft, sanctions violations and racketeering charges in the US. 

The recent sanctions order goes beyond the initial executive order issued by the White House 1 year earlier banning the use of U.S. technology by foreign semiconductor manufacturers during the production without an export license in order to sell to Huawei. This new measure significantly restricts Huawei’s capacity to keep hardware production levels without the involvement of U.S. tech for both telecom equipment, smartphones and laptops. 

U.S. semiconductor manufacturers hold 45 percent share of the market and have become increasingly wary of conducting transactions with any Chinese for fear of encountering restrictions as well. These new rules come into effect post a 120 day grace period during which companies can fulfill Huawei’s purchases. The Chinese government has indicated possible retaliation through blacklisting of U.S. technology firms Apple, Cisco and Qualcomm or stopping Boeing jet purchases.

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