U.S. adds new sanctions on Chinese tech giant Huawei

BOSTON — The U.S. government imposed new restrictions on Chinese tech giant Huawei on Friday, limiting its ability to use American technology to design and manufacture semiconductors produced for it abroad.

The Commerce Department said Friday the move aims to prevent Huawei from making a run around existing U.S. sanctions.

“It looks like a victory for the people who really want to drive the nail, or what they think will be the nail, in Huawei’s coffin,” said Adam Segal, a senior fellow at the Council on Foreign Relations.

The move elicited an angry response from China, which threatened retaliation against U.S. companies.

Chip design and manufacturing equipment used in the world’s semiconductor plants is mostly U.S. made, so the new rule could adversely affecty multiple foreign producers that sell to Huawei and affiliates including HiSilicon, which makes chips used in supercomputers with scientific and military uses. The U.S. Commerce Department said foreign foundries would be granted a 120-day grace period.

Under the new rules, foreign semiconductor makers must obtain a licence from U.S. officials in order to ship to Huaweidesigned semiconductors to the

Chinese company that were produced using U.S. technology.

Last year, the Trump administration barred U.S. firms from using Huawei technology or providing technology to the Chinese firm without government approval, deeming it a national security risk. The Commerce Department exempted a narrow list of products and services and has continuously extended that limited waiver, in part to lessen the impact on U.S. wireless carriers that use Huawei technology in their networks. This week, it added another 90 days.

The new restrictions are separate from those exemptions, and loopholes have allowed U.S. companies to continue to supply Huawei with chips made outside the U.S. The Commerce Department said Friday that the new restrictions would “narrowly and strategically” target Huawei’s acquisition of semiconductors that it designs built in overseas foundries that use U.S. software and technology. Kevin Wolf, an attorney at Akin Gump who oversaw export administration at the Commerce Department during the Obama administration, noted the narrow scope of the rules.

“If a foreign foundry makes a chip based on a Huawei design and U.S. equipment is used to make a chip then it’s controlled, but if a chip is not made from a Huawei design then it is not controlled,” he said.