The U.S. has added China’s telecoms giant Huawei, and at least 70 affiliates to a list the Commerce Department calls “Entity List.”
The move to blacklist the Chinese company also sees it hit with severe sanctions- Huawei will not be able to buy parts or components from American companies without the approval of the U.S. government.
The decision comes in the wake of trade tensions between the U.S. and China, and could potentially make it difficult for the world’s largest producer of telecommunications equipment to sell some of its products as it heavily relies on supplies from the U.S.
The order blacklisting Huawei, which comes into effect in the next few days, means that, it is obligatory for the Chinese firm to acquire U.S. government licenses if it wants to purchase American technology.
According to Commerce Secretary Wilbur Ross, the move to ban Huawei had the backing of the U.S. President Donald Trump. Ross noted in a statement that the decision was taken so as to “prevent” foreign-owned entities from using American technology in a way that could end up undermining U.S. national security.
Other than the tariff war that has escalated trade tensions, Washington has been aggressive in its lobbying of other countries against using Huawei products in the manufacture of next-gen 5G networks.
The U.S. is reportedly taking this dramatic step following revelations from a Huawei indictment report unsealed by the Justice Department in January. The indictment, which also included other entities, noted that the Chinese conglomerate had conspired to help Iran access proscribed financial services.
As such, the U.S. says there is every possibility that Huawei is “engaged in activities” that could constitute a threat to the U.S. or its foreign policy interests.
A similar move was taken against Huawei rival ZTE Corp, which the U.S added to its entity list in March 2016. The Commerce Department had said at the time that ZTE had contrived to conceal its apparent re-export of items imported from the U.S. to countries hit with sanctions, something that violated U.S. law.
The restrictions were, however, eventually suspended and ZTE was able to maintain its ties with U.S.-based suppliers.