China's Huawei restricted from using USA suppliers

Trump takes first step toward U.S. ban on Huawei products

A Huawei logo is seen at an exhibition during the World Intelligence Congress in Tianjin, China May 16, 2019.

"This will prevent American technology from being used by foreign-owned entities in ways that potentially undermine United States national security or foreign policy interests", Commerce Secretary Wilbur Ross said.

A Trump administration decision to restrict the sale of US technology to Chinese telecommunications company Huawei will disrupt global supply chains, say analysts, ramping up pressure on USA allies reluctant to join in efforts to shut out Huawei from advanced 5G mobile networks.

A member of Huawei's reception staff walks in the foyer of a building at the company's Bantian campus in April in Shenzhen, China. If the USA has no access to China's tech do we have a product? Foreign Ministry spokesperson Lu Kang accused the United States of "abus [ing] export control measures while making "national security" a catch-all phrase".

Richard Dearlove said, in the forward to a report by the Henry Jackson Society thinktank, the fact that the United Kingdom government "now appears to have made a decision to place the development of some its most sensitive critical infrastructure in the hands of a company from the People's Republic of China (PRC) is deeply worrying". But even if the allegations were true, company officials told CNET in an interview that the security threat is still minimal simply because of the way communications networks are built.

While China has made no specific link between the detentions of the two men and Meng's arrest, experts and former diplomats say they have no doubt it is using their cases to pressure Canada. It gives the Commerce Department 150 days to draft rules to restrict these sorts of sales. It later revised the number of affiliates down to 68.

Meanwhile in the United Kingdom on Thursday, a report was issued by lawmakers and academics urging a Huawei ban on national security grounds, which includes a plea from a former MI6 chief, Richard Dearlove, calling for the U.K.to reconsider its partnerships with Huawei.

Obtaining such approval will not be easy.

Shares in Huawei suppliers in China skidded on the news as markets opened in Asia, with Luxshare Precision Industry down as much as 6.1%.

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USA lawmakers have long feared that the firm's equipment could be used to spy on Americans, and Democrats and Republicans lined up in support of the Trump administration's move.

Data out of the United States showed USA retail sales fell in April as households cut back on purchases of motor vehicles and other goods, pointing to a slowdown in economic growth after a boost from exports and inventories in the first quarter.

"Restricting Huawei from doing business in the USA will not make the US more secure or stronger; instead, this will only serve to limit the U.S.to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment", the company said in a statement to Android Authority. Qualcomm fell 4 per cent, Broadcom Inc. was down 2.3 per cent and Xilinx Inc.

President Trump has ramped up the pressure by raising tariffs on a list of $200 billion worth of Chinese imports from 10 percent to 25 percent. -China trade war, a national emergency declaration over threats against American technology.

"There's other things they can do, and M&A would certainly be one thing", said Stacy Rasgon, an analyst with Bernstein.

China believes tariffs were the genesis of the trade dispute, and that all tariffs must be eliminated in order to reach a deal.

"We urge the U.S. side to stop its wrong practice, create conditions for normal trade cooperation for companies of the two countries and avoid further impacts on China-U.S. trade relations", Ministry of Commerce spokesperson Gao Feng said Wednesday.

The Chinese manufacturing giant has sent an e-mail to its employees on the U.S. inclusion of Huawei in the "list of entities".

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