Huawei is still in the crosshairs of the United States. Washington is now considering blocking the firm by financing its direct competitors in the field of 5G. To penalize the Chinese group, the U.S. government is even willing to release more than $1 billion. At the same time, the United States is preparing to strengthen sanctions.
On January 15, 2020, Donald Trump and Liu He, Chinese Vice Premier, signed the first phase of a trade agreement in Washington. Nevertheless, the trade war between China and the United States is far from over. On the same day, U.S. senators, Democrats and Republicans, introduced a bill before Congress to further penalize Huawei.
The bill provides for the creation of two investment funds to finance Huawei's competitors in the 5G market. An initial investment fund of $750 million would be set up to support firms that offer alternatives to Huawei's 5G equipment. Despite the current sanctions, Huawei remains the undisputed leader of 5G, ahead of Nokia and Ericsson.
A second fund, funded to the tune of $500 million, would be dedicated to companies that offer "reliable and secure equipment around the world." The bill does not cite any particular firm. To finance these funds, Washington plans to raise 5% of the money obtained through the 5G auction. The funds would therefore be indirectly financed by U.S. telecommunications operators. At this time, the bill has not yet been finalised.
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The United States wants to strengthen sanctions, the war continues!
That’s not all. According to our Reuters colleagues, Washington is still considering strengthening sanctions against Huawei. The Commerce Department is reportedly preparing to amend a law called De Minimis to cut off Huawei's supply sources around the world. Currently, the United States can only block exports if the products concerned are made up of more than 25% of American technologies. Washington is seeking to lower that threshold to 10%. The amendment is still being approved by U.S. government agencies, Reuters reports.
Source: Reuters