White House To Unveil Rule Banning Agencies From Doing Business With Huawei

As has long been expected, the White House is preparing to release a new rule on Wednesday barring government agencies from buying equipment or doing any kind of business with Chinese telecoms giant Huawei - ratcheting up tensions between the world's two largest economies at an already precarious time for the global economy.

Here's more from CNBC:

The Trump administration is expected to release a rule Wednesday afternoon that bans agencies from directly purchasing telecom, video surveillance equipment or services from Huawei. The prohibition was mandated by Congress as part of a broader defense bill signed into law last year.

"The administration has a strong commitment to defending our nation from foreign adversaries, and will fully comply with Congress on the implementation of the prohibition of Chinese telecom and video surveillance equipment, including Huawei equipment," said Jacob Wood, a spokesman for the Office of Management and Budget.

Per CNBC, the new rule is expected to take effect a week from Wednesday, and it applies not only to Huawei, but also to a list of other telecom companies that have drawn security concerns, such as ZTE and Hikvision.

The official said contractors will be able to seek waivers from individual federal agencies if they believe their business with any of the targeted companies should be exempt from the rule.

Moreover, the new rule will also set a deadline of August 2020 for a broader ban on federal contractors doing business with Huawei and other firms.

The law passed by Congress is separate from the Trump Administration's own efforts to keep Huawei in check.

The Commerce Department instigated the tensions between the US and China after it placed Huawei on a blacklist that effectively bans the company from buying goods or doing any kind of business with Huawei. A 90-day grace period that kept Huawei off the blacklist temporarily is now almost over. And President Trump has apparently walked back his promised, made at the G-20 Summit in Osaka, to ease the pressure on Huawei.

However, US chipmakers and tech firms can request waivers, and the CEOs of Google, Qualcomm, Micron, Intel and others met with President Donald Trump at the White House last month and urged the administration to issue those decisions quickly.

In an interview on CNBC, Huawei CSO Andy Purdy defended the company’s track record, arguing that European leaders in the UK and Germany had told their counterparts in the US that they had found no evidence that Huawei was a security threat.

"We have tested the products of all vendors to international standards so that there’s trust through verification," Purdy said.

But that likely won't change anybody's mind.