Trump Admin Prepping Another Blow To Huawei Chip Suppliers

Advertisement
Advertisement

The Trump administration is preparing yet another major blow to Huawei amidst everything else going on. Insiders quoted by Reuters claim the White House is moving to effectively seize control of Huawei's global supply chain.

The plan is to have every foreign company dealing with the U.S. stop supplying Huawei unless Washington allows that. More specifically, the Republican administration is looking to issue licenses for such activities moving forward.

It remains unclear how difficult procuring those licenses would actually be. However, the development comes on the tail of numerous hostilities between the U.S. and Huawei. Due to that, the reported change is unlikely to be anything but bad news for the Chinese company.

Advertisement

As for the licenses themselves, it appears the legislative endeavor would primarily target chipset technologies. That's because virtually every major semiconductor firm on the planet uses American patents to some degree. In other words, Washington is more than able to deal this blow to Huawei's global supply chain all on its own.

Yet another Trump blow to Huawei – or is it?

While the government is moving forward with the initiative, it's not a given President Trump himself supports it. While he previously got personally involved in turning on the pressure on Huawei, he toned down on that rhetoric since the turn of the year.

He most recently did so last month, yet at the same time, he doubled down on blaming China for the ongoing current crisis. Like other prominent critics of Beijing, the President is adamant to refer to the new viral strain as a "Chinese" menace.

Advertisement

So, with or without Trump's personal support, the U.S. government's new anti-Huawei effort should become official in a matter of weeks. The move's just the latest episode in over two decades' worth of clashes between Washington and the Chinese conglomerate.

As for the legal framework behind the effort, the Trump administration is reportedly looking to pressure Huawei's suppliers with the Foreign Direct Product Rule. The Commerce Department's rulebook already allowed stateside authorities to dictate certain export policies to foreign companies. With the upcoming change, that power is expected to reach unprecedented heights.

In the meantime, Huawei leadership claims the company already weathered the worst of the crisis. The effects of everything happening should become clearer once Huawei publishes its quarterly financials next month. By that time, Trump's latest blow to Huawei's chip suppliers is likely to become official as well.

Advertisement