Huawei Ban: US Defense Blocks Further Clampdown, Bids For Balance

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Huawei seems to have got a temporary reprieve in the ongoing US-China trade war. The ban, initiated by the US Commerce Department, has found opposition from the least expected place. A Wall Street Journal report highlights that both the Defense and the Treasury Departments are pushing back on the Huawei ban.

US Defense Blocks Ban
 

US Defense Blocks Ban

It looks like Huawei has found a pretty strong ally in the most unexpected place. The Commerce Department had recently proposed to make things even harder for the Chinese tech giant. However, the opposition from the US Defense has reportedly, made the Commerce officials withdraw the proposal.

Huawei Ban Limited

"We have to be conscious of sustaining those [technology] companies' supply chains and those innovators. That's the balance we have to strike," said Defense Secretary Mark Esper in a report. From the looks of it, the US Defense is understanding the concerns raised by Qualcomm and other US Suppliers.

Ever since the Huawei ban was imposed, many of the tech giants feared that the trade war and Huawei ban would cut off the revenue, which can be used for further product research.

Why Was Huawei Ban Imposed
 

Why Was Huawei Ban Imposed

Huawei came under fire for allegedly flouting sanctions with other countries, imposed by the US. It started with Huawei's relation with Iran-based Skycom, which risked the violations of US sanctions. And so, Huawei CFO was arrested by the Canadian government. The arrest became the centerpiece of the trade war between the US and China.

Aptly, the US imposed a ban on Huawei, including selling 5G networking components and cited that the company was giving sensitive information to the Chinese government. As the trade war escalated, a lot of companies were banned from using Huawei equipment for their products.

What Next?

What Next?

The new rules drafted by the US Commerce Department would make it harder for American companies to sell to Huawei from overseas facilities. Even after the ban was imposed, many US-based firms continued selling to Huawei, taking advantage of the exemptions that most of the product development happens out of the US borders.

Presently, the threshold allows 75 percent of the work occurring overseas. But the US administration was bidding to raise it to 90 percent. Many companies have argued that such a ban is counterproductive since Huawei could buy chips from non-US providers.

To build its independence, Huawei has already begun reducing its dependency on US-based technologies. For one, there is the Huawei HarmonyOS and HMS Core as a replacement for Google services. According to the company, there are already 1.3 million developers signed up and more than 50,000 apps integrated with the HMS Core.

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