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U.S. Makes Another Move To Shut Out Huawei


Here's a question the tech industry wants the Trump administration to consider - how much will American firms get hurt by U.S. bans on Chinese technology? Congress and the White House continue to cut American ties to Chinese tech giant Huawei. Today, a new ban kicks in preventing the use of federal funds to buy equipment or services made by Chinese companies, including Huawei. Here's NPR's Alina Selyukh.

ALINA SELYUKH, BYLINE: Huawei is one of the largest smartphone makers in the world. It's now at the center of a web of laws and restrictions through which the U.S. has worked to freeze out Chinese technology from the nation's networks. The idea long predates the Trump administration, but enforcement has escalated this year, says James Lewis, researcher at the Center for Strategic and International Studies.

JAMES LEWIS: The government has always distrusted Huawei, and now it's become a much more public process. It's gone beyond the intelligence and law enforcement communities.

SELYUKH: Those communities have made the case that Huawei and other Chinese companies spy and steal American intellectual property, both of which Huawei has denied. The Trump administration took the business world by surprise in May by banning American companies from selling technology to Huawei without government approval. The blacklisting was leverage in the ongoing trade war, and it rattled major U.S. companies, including chipmakers Intel, Qualcomm and Micron, but also Google, whose Android system has historically powered Huawei smartphones around the world. They're extremely popular in Europe and obviously China.

BETH GEORGE: I think there's a difference between the way you hear people in D.C. describe China and people in, for example, Silicon Valley describe China.

SELYUKH: Beth George is a former Defense Department lawyer who's now at the firm Wilson Sonsini Goodrich & Rosati.

GEORGE: In D.C., people use the words like national security threat or unfair trade practices. And in Silicon Valley, you hear the next largest market and futures and opportunities.

SELYUKH: The tech companies, of course, will say they're just as concerned about security, but they're also worried about losing their connection with a massive worldwide telecom giant. For example, in Europe, Huawei is one of the companies working alongside U.S. chipmakers to develop 5G, the new generation of wireless service. In the U.S., Huawei has also been a major partner for smaller and rural telecom carriers, offering them cheaper deals on equipment to provide cell phone service.

After Huawei got blacklisted, the Commerce Department gave U.S. companies a reprieve, a grace period to keep working with Huawei on consumer-oriented products. That reprieve expires next week, and the Commerce Department has not signaled a plan to renew it. Lewis, with the think tank CSIS, says companies are also still waiting for requests for permanent exemptions.

LEWIS: So I think there's 50 applications. None of them have been approved, and it's been more than a month.

SELYUKH: On Friday, soon after China said it would stop importing American agricultural goods, reporters asked Trump about Huawei.


PRESIDENT DONALD TRUMP: It's much simpler not to do any business with Huawei, so we're not doing business with Huawei.

SELYUKH: On that same day, Huawei unveiled an operating system of its own called HarmonyOS. The company says that system would replace Google's Android on its phones if it comes to that. Alina Selyukh, NPR News.

(SOUNDBITE OF MARLEY CARROLL'S "MIGRATION") Transcript provided by NPR, Copyright NPR.

Alina Selyukh is a business correspondent at NPR, where she follows the path of the retail and tech industries, tracking how America's biggest companies are influencing the way we spend our time, money, and energy.