US regulators 'could tighten crippling Huawei embargo even further'

21 May 2020, 11:23 | Updated: 21 May 2020, 16:20

US regulators could tighten the country's crippling embargo on Chinese technology company Huawei even further, according to a report regarding a potential loophole in the law.

Restrictions on computer chips designed by Huawei do not cover shipments if they are sent directly to the firm's customers, according to two officials cited by Reuters.

According to Christopher Ford at the US State Department, the regulations could be adapted "if Huawei tries to work around our rules in some way".

The State Department said the agency's enforcement arm "will be looking at efforts to circumvent the rules".

Last year, the American government placed Huawei on the commerce department's so-called "entity list", preventing US companies from supplying it with their technology.

It did so claiming that Huawei posed a national security threat to the US.

This technology included the licensed version of the Android operating system, which runs on all of Huawei's smartphones - potentially meaning users would no longer receive security updates.

In particular the US had campaigned internationally for countries to refuse to allow Huawei networking equipment to be included within their rollout of 5G technology.

President Donald Trump was reportedly "apoplectic" with fury in a phone call with Boris Johnson over the prime minister's decision to permit Huawei a restricted role in the UK's 5G network.

A new rule announced last Friday expanded the embargo to include semiconductors manufactured outside of the US, but which used American technology.

The deeply damaging measure threatened to cut off Huawei's supply of computer chips used across its product line, from radio base stations to servers and smartphones.

Huawei's response at the time was a marked departure from the tone companies normally affect in public statements, saying the US government's latest measures were "arbitrary and pernicious".

The company said the move was part of a "relentless pursuit to tighten its stranglehold on our company".

As Sky News business presenter Ian King wrote, "companies are, as a rule, diplomatic in their statements".

"One can only imagine the fury in the boardroom at Huawei [...] if its statement today is anything to go by," he said.

Huawei has claimed the new US embargo will impact its work in more than 170 countries and hit computer networks worth hundreds of billions of dollars.

"This decision by the US government does not just affect Huawei," said its statement.

"It will have a serious impact on a wide number of global industries.

"The US is leveraging its own technological strengths to crush companies outside its own borders.

"This will only serve to undermine the trust international companies place in US technology and supply chains."

"Ultimately, this will harm US interests," the company added.