The US Commerce Department claimed it is including Huawei Technologies Co Ltd and 70 affiliates to its so-called “Entity List” – a potential move which bans the telecom giant from purchasing and components from US companies without the approval of the US government.
US officials informed the media that the decision would also make it difficult if not possible for Huawei, the biggest telecommunications equipment producer in the world, for selling some products as its dependency on US suppliers.
Under the order which will affect in the coming days, Huawei will require a US government license for purchasing American technology. Huawei did not comment immediately.
Commerce Secretary Wilber Ross said in a statement US President Donald Trump supported the decision which will “ prevent American technology from being used by foreign-owned entities in ways that potentially undermine U.S. national security or foreign policy interests”.
The remarkable move comes as the US President has influenced aggressively other countries not to be a consumer of Huawei equipment for the 5G networks and emerges just after Trump administration enforced new tariffs on the Chinese goods amid a mounting trade war.
The Commerce Department said the move comes after the US Justice Department removed an indictment in January of Huawei and few entities which said the company had schemed to provide banned the financial services to Iran. The department reported it has proper reasons to reach the conclusion that Huawei is “ engaged in activities that are contrary to U.S. national security or foreign policy interest”.
Huawei reported first-quarter revenue of $27 billion last month and said it had carried 59 million smartphones in the first quarter.
In March 2016, the Commerce Department included ZTE Crop to the entity list over allegations it arranged a detailed scheme for hiding its re-export of US items to approved countries in violation of US law.
The restraining measurements blocked suppliers from providing ZTE with US equipment, potentially confining the supply chain of the Huawei rivals, but they were short-spanned. The restrictions suspended by the US in a sequence of provisional spares, permitting the company for maintaining ties to US suppliers until it acknowledged to a plea deal a year later.
In August, Trump registered a bill which hindered the US government itself from using equipment from Huawei and ZTE.
Senator Ben Sasse, a Republican, said “ Huawei’s supply chain depends on contracts with American companies” and he requested the Commerce Department for looking at how we can interrupt our adversary effectively.