The US government is considering introducing new trade restrictions on China, which would make it more difficult for chip manufacturers to use American kit.
According to The Wall Street Journal, the Department of Commerce is set to change the foreign direct product rule. Under the proposed changes, chip makers would need to obtain a special license to use American gear to build chips for Chinese firm Huawei.
If the proposed measures are implemented, China will have trouble accessing American-built semiconductors, which the country buys in large quantities. However, these changes would almost certainly hurt American businesses too.
Huawei has been in US cross hairs for months now, with the government claiming its 5G infrastructure could be used by the Chinese regime for espionage, and as such presents a threat to national security.
The US government has urged foreign powers to follow its lead and bar Huawei from their 5G networks. While some agreed, the UK decided to allow Huawei to contribute, albeit only to “non-essential parts” of the network.
The US even said that it would withhold valuable intelligence from any allies whose communications equipment contains Chinese-made gear.
Huawei vehemently denies the allegations, dismissing them as baseless. The company says its gear is as secure as anyone else’s and has invited international commissions to review its products.