The US withdraws proposal to stiffen the ban on Huawei

Chinese manufacturing giant, Huawei, is facing a lot of troubles with the US. In the face of these uncertainties, Huawei remains resolute that it can survive without the US. Huawei’s founder, Ren Zhengfei and President, Yu Chengdong have repeatedly reiterated the company’s stand on the US. Huawei seems to have an alternative to all US supplies except Google’s Mobile Services of course. Nevertheless, the companies smartphone sales for 2019 indicates that the US ban had little or no effect on Huawei’s performance in the smartphone market. Subsequently, there were plans in the US to tighten the ban conditions on Huawei. This will make it more difficult for US companies to sell to Huawei via their foreign facilities.

The US Treasury Department & DoD opposes the Department of Commerce

However, the Department of Commerce’s effort to stiffen the ban met stiff opposition. The opposition is basically from the US Department of Defense and the Treasury Department. Consequently, the Department of Commerce had no choice but to withdraw its proposed regulations.

According to WSJ, the U.S. Department of Defense has some concerns. According to the report, stiff regulations will damage the profits of American companies.  This will affect the available funds for research and development and will subsequently dent the technological competitiveness of American companies.

The business exchanges between American companies and Huawei are quite important for some of these companies. If American companies will suffer, is the stiff regulations really worth it? This is a very important question that needs an answer. More so, these companies are not buying from Huawei, it is the other way round thus the regulation seem irrelevant.

Already, Huawei has replaced many of its U.S. suppliers. The few that are still in its supply chain have viable alternatives.  The U.S. Treasury will hold a conference on Huawei and other China-related issues in the coming weeks. Huawei’s original ban still stands but plans to make things harder is out of the picture for now.