U.S. Commerce Department’s Huawei Restrictions Killing U.S. Commerce

Aug. 31, 2020 (EIRNS)—On Aug. 17, the Department of Commerce’s Bureau of Industry and Security (BIS) added 38 worldwide subsidiaries of Huawei to their Entity List, prohibiting U.S. chip manufacturers from selling to with them without permission; and further tightened the rules involving engagement, in general. The BIS had already put 70 Huawei affiliates on the Entity List in May.

Too many to list individually, the list literally covers the globe, the only continent not mentioned being Australia (likely because they have done their own purge of Huawei). In descending order, the targeted affiliates include 10 in China itself; 8 in Europe; 6 in South America; 4 each in Southeast Asia and Africa; 2 each in Russia and Southwest Asia; and 2 in India.

This action was immediately endorsed by Secretary of State “Pompous Mike” Pompeo, who was then in Prague, on his tour of Eastern Europe. “The Department of State strongly supports the Commerce Department’s expansion today of its Foreign Direct Product Rule,” Pompeo said on Aug. 17, “which will prevent Huawei from circumventing U.S. law through alternative chip production and provision of off-the-shelf chips produced with tools acquired from the United States.”

This action, by the so-called Commerce Department, is actually severely detrimental to U.S. commerce. The chip market currently represents some of the highest-technology productive capability currently existing in the struggling American economy. In the wake of the filing, industry spokesmen have come forward to declare that Huawei accounts for a full 25% of the $130 billion U.S. chip export market, which stands to take a $32 billion hit as a result of this escalation in the New Cold War.

“Everybody knows this is a Trump Administration move, but I’m missing the long-term strategy and the next step,” one industry CEO observed to trade site FierceElectronics. “If they are ruining a foreign company because they can, that’s not a wise choice. If there is a higher goal to get the Chinese to do something they have not done, what is the next step?”