US poised to limit Huawei’s future revenues

In an attempt to squeeze the blacklisted telecommunications company, two sources told the news agency Reuters, the US administration has nearly released a law which would extend its power to block shipments of foreign-made products to Huawei China.

Huawei Technologies Co Ltd. was placed on a trading blacklist in May by the US Commerce Department and linked to national security concerns. It allowed the US administration to limit the company’s selling to products made by the USA and a limited number of products made abroad using US technology.

Under current rules, major foreign supply chains remain beyond US authorities ‘ control, increasing tension amongst China’s administration hawks, and forcing the US authorities to prevent more expeditions to Huawei.

Nonetheless, American companies argue that any attempt to encourages Huawei to restrict more shipments to include low-tech products made in the world with very small U.S. technologies will end up hurting US businesses unfairly while allowing Huawei to sell more foreign goods.

Reuters said in November that the Department of Commerce was proposing the extension of the de minimis rule which specifies the amount of American content that the US government regulates exports from a foreign-made product.

Under current regulations, if US-based products represent more than 25 percent of the value, the U.S. may request a license or ban exports from several hi-tech products imported to China from other countries.

According to two familiar people, Commercial has drawn up a rule that would only reduce the export ceiling to Huawei to 10% and expand the authority to include non-tech products, such as consumer electronics and critical chips.

Another source said that after last week’s Interagency Meeting the Commerce Department sent the regulation to the Office of Management and Budget.