Commerce Department cracks down on Huawei's access to chips

Commerce Department cracks down on Huawei's access to chips
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The Commerce Department announced Friday that it would restrict Chinese telecom group Huawei’s ability to use American technology and software to manufacture semiconductors, the latest step by the Trump administration to crack down on the company. 

The new rule requires companies selling chips — semiconductors used in cellphones and other electronic devices — to Huawei that are made abroad with any U.S. parts or technologies to obtain a license, blocking Huawei from access to a large share of chip production. 

The Commerce Department also extended the temporary license allowing certain American companies to do business with Huawei despite the company’s inclusion on the Commerce Department’s “entity list,” which essentially blacklists the telecom group. 

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Huawei was added to the list last year, but the agency has issued a temporary extension since then to give U.S. businesses time to transition away from using Huawei equipment. The new 90-day extension runs through August. 

“Despite the Entity List actions the Department took last year, Huawei and its foreign affiliates have stepped-up efforts to undermine these national security-based restrictions through an indigenization effort. However, that effort is still dependent on U.S. technologies,” Commerce Secretary Wilbur RossWilbur Louis RossBannon's subpoena snub sets up big decision for Biden DOJ House panel, Commerce Department reach agreement on census documents China sanctions Wilbur Ross, others after US warns of doing business in Hong Kong MORE said in a statement on Friday.

“This is not how a responsible global corporate citizen behaves,” he added. “We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests.”

Reuters first reported that senior Trump administration officials were considering cracking down on Huawei’s access to chips using U.S. technology in March.

A spokesperson for Huawei, which is the largest producer of 5G equipment in the world, did not immediately respond to The Hill's request for comment on the Commerce Department actions. 

Concerns around Huawei stem from a 2017 Chinese intelligence law that requires companies and citizens to disclose sensitive data and information to the government if requested. 

The Trump administration and members of Congress on both sides of the aisle have taken a series of actions against the company over the past year. 

The Federal Communications Commission (FCC) voted unanimously to classify Huawei as a national security threat in November, while President TrumpDonald TrumpRobert Gates says 'extreme polarization' is the greatest threat to US democracy Cassidy says he won't vote for Trump if he runs in 2024 Schiff says holding Bannon in criminal contempt 'a way of getting people's attention' MORE signed into law legislation in March that bans U.S. companies from using federal funds to buy Huawei equipment. The legislation also provided $1 billion to help small rural telecom groups rip out Huawei equipment and replace it.

Ross said during an appearance Friday on Fox Business that he was “pleased” with the funds given to rural groups.

“We are very pleased that Congress has appropriated $1 billion to help the rural telecoms wean themselves,” Ross said. “Now that we are giving them yet another extension, we want them to make clear to us during this extension to mid-August what they are doing to wean themselves from Huawei.”

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The moves against Huawei also come as tensions have spiked between the U.S. and China due to the COVID-19 pandemic and a day after Sen. Marsha BlackburnMarsha BlackburnButtigieg hits back after parental leave criticism: 'Really strange' Senate approves short-term debt ceiling increase Hillicon Valley — Presented by American Edge Project — Facebook experiences widespread outage MORE (R-Tenn.) asked her colleagues to stop taking meetings with Huawei and other Chinese companies such as TikTok. 

Sen. Ben SasseBen SasseInvoking 'Big Tech' as an accusation can endanger American security Biden slips further back to failed China policies The Memo: Generals' testimony on Afghanistan hurts Biden's credibility MORE (R-Neb.), a member of the Senate Intelligence Committee, applauded the Commerce Department’s efforts to cut off Huawei. 

“The United States needs to strangle Huawei,” Sasse said in a statement. “Modern wars are fought with semiconductors, and we were letting Huawei use our American designs. This is pretty simple: chip companies that depend on American technology can’t jump into bed with the Chinese Communist Party. This rule is long overdue.”