US sanctions on Huawei increased, further squeezing supply chain
Back in the May of 2019, the US government placed Huawei on its now infamous ‘Entity List’, barring US companies from doing business with the Chinese giant without a licence. One year on and Huawei was navigating these sanctions fairly successfully, relying heavily on third parties to provide them with American tech.
However, May of this year saw the closure of this significant loophole, with reworked sanctions now meaning that the Huawei cannot use electronics developed or produced using US technology. This was particularly devastating to Huawei’s semiconductor supply chain; for example, ending its access to the high-end Kirin 9000 chipset.
One of the biggest semiconductor producers in the world, Taiwan Semiconductor Manufacturing Co, has already said it will no longer ship chips to Huawei after September 15th, when the sanctions come into full effect.
Now, Reuters is reporting that the US is once again tightening their stranglehold on Huawei by further increasing their sanctions, adding a further 38 companies affiliated with Huawei to the 114 already on the economic blacklist.
US Secretary of State, Mike Pompeo said that these additional restrictions would “prevent Huawei from circumventing U.S. law through alternative chip production and provision of off-the-shelf chips.”
In addition to previous rules applied to this blacklist, companies on said list must now also acquire a license when a company like Huawei acts as “purchase, intermediate consignee, ultimate consignee, or end user”.
The Trump administration says the increased severity of the sanctions will stop Huawei from circumventing the policy through the use of third-party suppliers.
“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 Commerce Secretary Wilbur Ross. “This multi-pronged action demonstrates our continuing commitment to impede Huawei’s ability to do so.
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