Trump administration cracks down further against Huawei chip production, affiliate groups

The Commerce Department’s Bureau of Industry and Security on Monday announced further steps to push back against Chinese telecommunications company Huawei and blacklisted 38 Huawei affiliate groups.

The moves on Monday expanded a previous decision by the Commerce Department in May to restrict Huawei’s ability to use American software and technology to manufacture semiconductors or chips.

The new announcement is intended to limit Huawei’s access to chips by restricting its ability to purchase chips created by a foreign company with the use of American software or technology. 

In addition, 38 Huawei affiliate groups were all added to the Commerce Department’s “entity list” on Monday, with U.S. companies banned from doing business with groups on the list. 

Huawei was added to the entity list last year, though the full addition had been delayed several times by a temporary general license that expired last week, with the delay intended to help rural telecom groups that had previously relied on Huawei equipment.

The Commerce Department announced Monday that the license would not be extended any further, but created an exception for users sending information on cybersecurity vulnerabilities in Huawei equipment to the Chinese group. 

The 38 Huawei affiliate companies added to the entity list are based in 21 countries, including Huawei Cloud groups in France, Peru, Argentina, Chile, the Netherlands, Russia and Singapore. 

Secretary of Commerce Wilbur Ross said in a statement Monday that “Huawei and its foreign affiliates have extended their efforts to obtain advanced semiconductors developed or produced from U.S. software and technology in order to fulfill the policy objectives of the Chinese Communist Party.”

“As we have restricted its access to U.S. technology, Huawei and its affiliates have worked through third parties to harness U.S. technology in a manner that undermines U.S. national security and foreign policy interests,” Ross added. “This multi-pronged action demonstrates our continuing commitment to impede Huawei’s ability to do so.”

A spokesperson for Huawei did not immediately have a comment on the Commerce Department announcement. The company is one of the largest 5G telecommunications equipment groups in the world and has consistently pushed back against concerns that it could pose an espionage or national security threat. 

President Trump said during a phone interview with “Fox & Friends” on Monday that Huawei was able to “spy on us” through the use of their equipment in telecommunications systems, describing the company as “a disaster.”

“They used to have free reign over our country,” Trump said. “They knew everything we were doing. Huawei is really, I call it the ‘Spy-wei.’ What happens is Huawei comes out and they spy on our country. This is very intricate stuff. You have microchips, you have things that you can’t even see. They spy.”

Trump pointed to recent reversals by the United Kingdom on using Huawei equipment in sensitive networks, with the United Kingdom moving to rip out and replace Huawei equipment from its 5G networks by 2027. France announced last month it would advise its telecommunications operators to avoid using Huawei equipment, but skirted an outright ban on the company.  

“With the U.K., we said, we love Scotland Yard very much but we’re not going to do business with you because if you use the Huawei system, that means they’re spying on you, that would mean they’re spying on us,” Trump said. “And I’ve gotten just about every country to drop it.” 

Secretary of State Mike Pompeo applauded the further actions to limit Huawei, describing the company in a statement as an “arm of the Chinese Communist Party’s surveillance state.”

“We will not tolerate efforts by the CCP to undermine the privacy of our citizens, our businesses’ intellectual property, or the integrity of next-generation networks worldwide,” Pompeo said. 

White House trade adviser Peter Navarro tied the moves against Huawei on Monday to overall tensions between the U.S. and China over the COVID-19 crisis and past Chinese intellectual property theft. 

“In America, down to the general public, we’re all China hawks now, and for good reason,” Navarro said during an appearance on CNBC’s “Squawk Box.” “In the middle of this last decade, they stole all our jobs using things like massive subsidies, intellectual property theft, hacking our computers.”

He added that “now what they have done to us is basically infect this country with a deadly China virus that’s killed over 160,000 Americans, cost us trillions of dollars of our wealth, and really created some headwind, so we are all China hawks now.”

The new moves Monday come after multiple other actions against Huawei over the past year.

The Federal Communications Commission (FCC) formally designated Huawei and Chinese telecom group ZTE as national security threats, blocking use of FCC funds to purchase equipment from the groups, while President Trump signed into law legislation in March that bans the use of federal funds to purchase equipment from telecom companies deemed a threat, such as Huawei.  

The moves against Huawei come as the Trump administration has increasingly cracked down on Chinese groups in the United States. Trump issued an executive order last week ordering Chinese group ByteDance to divest itself of U.S. stakes of popular social media app TikTok within 90 days, making similar moves in regards to the Chinese owner of WeChat.