Adding more affiliates to the blacklist . . .
The U.S. Department of Commerce announced today that it is expanding restrictions on Huawei’s access to processing chips. The initial restrictions, announced in May 2019, required companies selling U.S.-made products to obtain a licence from the Department of Commerce. The new restrictions will cover foreign-produced goods that are either developed or produced with U.S. software or technology. The restrictions also add 38 Huawei entities in 21 countries to the U.S. blacklist, making a total of 152 Huawei affiliates subject to U.S. restrictions. U.S. Secretary of State Mike Pompeo said that the new rules will prevent Huawei from circumventing U.S. export controls.
Huawei is running out of chips . . .
The U.S.’ latest move against Huawei comes amid news early this month that the Chinese tech giant is running out of processor chips for smartphones due to the previous sanctions, which barred any semiconductors manufacturer using U.S. technology to supply Huawei without a licence. Huawei contracts Taiwan Semiconductor Manufacturing Company (TSMC) to manufacture most of its smartphone chips. Since TSMC uses U.S.-made manufacturing equipment, the company is required to comply with U.S. restrictions. The company reportedly will stop supplying Huawei after September 14.
U.S.-China 'decoupling' accelerates . . .
The U.S. sanctions against Huawei follow a broader pattern of the Trump administration’s effort to 'decouple' with China. Earlier this month, the administration also targeted Chinese tech giants TikTok and Tencent by banning any U.S. firms and citizens from doing business with these companies. Escalating tensions also loom in the financial sector, as the U.S. moves to halt pension funds from investing in Chinese stock and threatens to delist Chinese companies from U.S. stock exchanges. As the U.S. edges closer to the presidential election in November, Asia watchers should pay attention to see whether or not the next administration will maintain the current U.S. 'decoupling' approach.