Pentagon Fights Regulation Of American Business With Huawei


The Pentagon is working to prevent regulations on business between U.S. firms and Huawei.

The Commerce Department has been actively working at making it more difficult for U.S. firms to continue business with Huawei. As of now, if a product contains more than 25% of American-made parts, the vendor must have an export license to sell it to Huawei. There is talk of lowering that amount even further to 10%. Lowering the threshold needed for an export license would cover a lot more U.S. firms.

The Pentagon is worried that regulating business with Huawei will lower revenue for a lot of American firms to the extent that future research and development is infringed upon. Less research and development would lead to less future innovation. Additionally, there is worry that the U.S. will fall behind on technological innovations since Huawei is so heavily subsidized by the Chinese government.

“We have to be conscious of sustaining those [technology] companies’ supply chains and those innovators,” Defense Secretary Mark Esper said. “That’s the balance we have to strike.”

The U.S. has been trying to get other governments around the world to regulate their business relations with Huawei. Their rationale being that Huawei provides an easy platform for the Chinese government to spy against other countries.

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Economics, Finance and Investing