Tougher Huawei Restrictions Stall After Defense Department Objects

on Jan24
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A Pentagon spokeswoman, Sue Gough, said the department was aware of Commerce’s proposed rule change, but “will not prematurely discuss ongoing interagency collaboration.”

A spokesman for the Commerce Department said that “if or when we have something to announce, we will do so.”

The Trump administration has been leading a global offensive to try to discourage other leaders, including in Britain, Germany, the United Arab Emirates and India, from allowing Huawei to construct the next generation of telecom networks, with limited success.

Mr. Trump’s advisers warn that allowing Huawei — and other Chinese companies — to build fifth-generation, or 5G, networks could compromise intelligence sharing between the United States and its allies. But foreign officials have complained that the United States government has not provided evidence that Huawei poses a real threat.

The American crackdown has prompted Huawei to try to reduce its dependence on the United States.

It has recently produced handsets and telecom equipment that do not contain any American components. The company has found substitutes for some parts from suppliers in other countries, including Japan, and its in-house semiconductor unit, HiSilicon, has developed replacements for some advanced chips.

The proposed rule change would most likely accelerate these efforts, and could persuade companies like Taiwan Semiconductor Manufacturing Corporation, which uses many American parts, to halt purchases from the United States, at least temporarily, Paul Triolo, practice head of geo-technology for Eurasia Group, wrote in a note to clients.

Industry executives say other Chinese companies are concluding that American companies are also unreliable suppliers, given the administration’s China crackdown. Manufacturers of computers, air-conditioners, medical devices and other products are canceling their contracts with American firms and turning to European and Japanese products, they said.



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