The US Commerce Department has withdrawn proposals to tighten restrictions on US firms selling to Huawei, the Wall Street Journal reports. People familiar with the matter said the plans were blocked by the Defense Department, which is concerned about the impact on tech firms from the loss of sales to Huawei.
The Pentagon is concerned that if US firms can’t continue to ship to Huawei, they will lose a key source of revenue, depriving them of money for research and development needed to maintain a technological edge, the report said. The chip industry has pressed that argument in talks with government officials.
Defense Secretary Mark Esper said “we have to be conscious of sustaining those [technology] companies’ supply chains and those innovators”. He was asked about the WSJ report during an appearance at the Center for Strategic and International Studies in Washington.
After the paper reported on the Pentagon’s action, US Senators Ben Sasse, Tom Cotton and Marco Rubio sent a letter to Esper asking him to explain his rationale. They have pushed for a harder stance against Huawei, calling it “an arm of the Chinese Communist Party”. Huawei has repeatedly denied such a connection.
Support for new suppliers
Separately, the US government is exploring how it could help companies produce hardware that could compete with Huawei on 5G within 18 months, a senior administration official said. Discussions include government and corporate representatives from Japan and other democratic countries, the official said.
That effort would help the US persuade other nations, including the UK and Germany, to bar Huawei equipment from their networks, the official said.
