Again ready to quarrel with China.
The U.S. is again ready to quarrel with China.
The U.S. is introducing licensing rules that may prevent global chip shipments to Chinese giant Huawei. Media report on potential countermeasures by Beijing against Apple, Cisco, Qualcomm and Boeing
After the U.S.-China trade war, which lasted about 18 months, Beijing's accusations of a global pandemic of COVID-19, the countries again faced the threat of serious conflict.
In recent weeks, President Donald Trump's administration has taken several steps to target Chinese telecommunications companies.
Chip manufacturers must obtain a license in the United States...
On Friday, the U.S. Department of Commerce announced changes to export regulations that require all foreign companies that use U.S. technology to manufacture chips to obtain a U.S. license before shipping certain chips to Huawei or its subsidiary, such as HiSilicon.
The rule will apply after 120 days and also applies to Taiwan Semiconductor, the largest contract chip maker and key supplier to Huawei, which announced plans to build a factory in the U.S. last Thursday.
The Department of Commerce made a small temporary exception for American companies that operate Huawei equipment in rural areas of America. However, this temporary license will only allow them to continue doing business with Huawei until August 13.
These measures could actually hinder the export of the world's No. 2 smartphone manufacturer.
Cove a loophole
The ministry said that Huawei continues to use U.S. software and technology to develop semiconductor devices, despite the fact that in May 2019 the company was blacklisted in the U.S. economy.
US Secretary of Commerce Wilbur Ross said on Friday at Fox Business Network:
"There was a technical loophole that allowed Huawei, in fact, to use American technology with foreign manufacturers."
The U.S. has previously attempted to exclude Huawei equipment from next-generation 5G networks on the grounds that the equipment of this company, its divisions and subsidiaries can be used by China for espionage. Huawei has repeatedly denied the suit, and Beijing has denied the charges.
National security issue
On Friday, when announcing changes in export regulations, Commerce Minister Wilbur Ross repeated this early rhetoric.
The secretary said the measures are aimed at "preventing the use of U.S. technology in malicious acts contrary to national security and foreign policy interests of the United States. He added, however, that Huawei and its affiliates "have stepped up efforts to undermine national security.
John Neuffer, Executive Director of the Semiconductor Manufacturers Association, said:
"We are concerned that this rule may create uncertainty and disrupt the global semiconductor supply chain, but it seems to do less harm to the U.S. semiconductor industry than previously considered very broad approaches.
Last week, President Donald Trump extended the May 2019 executive order prohibiting U.S. companies from using telecommunications equipment created by companies deemed to pose a threat to national security for another year, a move aimed at Huawei and ZTE Corp.
China's response has been swift: On Friday, China Global Times (believed its publications reflect the views of the government) wrote that Beijing was preparing to include U.S. companies in the "list of unreliable organizations" as part of countermeasures in response to new restrictions for Huawei.
The measures include launching investigations and imposing restrictions on US companies such as Apple, Cisco Systems and Qualcomm, as well as suspending purchases of Boeing aircraft.
On Friday, at the close of trading Qualcomm shares fell by 5.13%, while shares of other named companies did not change or rose (Boeing shares closed with an increase of 6.29%).