Pentagon nixes proposal to toughen limits on United States sales to Huawei

Pentagon blocks Commerce Dept-imposed ban on Huawei sales

Pentagon blocks Commerce Dept-imposed ban on Huawei sales

It seems that Zhengfei was right as according to Ross the new terms and conditions are "works in progress that will come out near-term".

Concerns similar to the concerns raised by Qualcomm and other suppliers to the White House, the Pentagon thinks that blocking trade with Huawei would mean being from revenue that could be used for further product research.

According to a newly proposed draft rule, the United States is set to further clamp down on Huawei, by lowering the threshold of American content in products to be barred from being supplied to the Chinese telecom titan.

The continuing debate over how and whether to tighten the crackdown on Huawei - expected to resume at the Cabinet level as soon as next week - illustrates the administration's ongoing struggle with competing impulses toward China.

Speaking earlier on Sunday, National Economic Council director Larry Kudlow said the Commerce department would extend the Huawei licensing process for three months as a gesture of "good faith" amid broader trade negotiations with China. The next step in that broader process isn't now active, he said.

A further clampdown may jeopardize Huawei's ability to continue making some of its biggest products. Huawei and ZTE and the Chinese government strongly denied these claims.

A spokesman for the Commerce Department declined to comment on the report and said "if we have something to announce or when we will do it, we will do it".

Currently, components and other electronic products made overseas that "contain less than 25% of content manufactured in the U.S. subject to export restrictions" can be sold to Huawei without a license, according to the Journal. De minimis provisions exempt certain products if companies can prove the majority of work done to create the items happens outside the US The current threshold effectively kicks in when 75% of the work occurs overseas.

The draft rule was then sent to the Office of Management and Budget, where agencies, including the Department of Defense, were given until Wednesday to submit comments, one of the people said.

It is important to mention here that the U.S government is working on a separate regulation that will impact the products designed in the USA but manufactured overseas.

The debate is taking place in the aftermath of Trump's January 15 signing of a "phase one" trade deal with China, which requires Chinese purchases of an additional $200 billion worth of American goods and services over the next two years. USA semiconductor makers have argued that a complete clampdown is counterproductive as numerous parts Huawei needs can be bought from non-US providers. The industry has made these arguments to Trump.

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