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Report: U.S. Tech Companies Successfully Circumvent Sanctions Against Huawei

By Yana Berman

Major U.S. chipmakers are successfully circumventing sanctions against Chinese tech giant Huawei, the New York Times reports Tuesday, June 25, citing sources familiar with the matter.

On May 16, the U.S. administration added Huawei to the list of companies that are banned from supplying telecommunication gear to U.S. firms, and vice versa.

According to the NYT’s sources, several major tech firms, including Intel and Micron, have found ways to avoid labelling their goods as U.S.-made — which allows them to supply parts to Huawei.

The use of this loophole reportedly started around three weeks ago. The volume of goods exchanged so far is reported to potentially have reached hundreds of millions of dollars.

Officially, American companies are allowed to sell chips and other equipment for current Huawei products before mid-August. However, the ban on supplies of components for future products of Huawei has already come into force.

As per the NYT, the U.S. administration is aware of the hidden sales. However, the officials’ opinions differ on how the government should deal with them.

While some believe that this loophole takes the necessary pressure off Huawei, others are inclined to support the sales in order to relieve similar pressure that is put on U.S. companies.

The officials are unlikely to speak out about the issue prior to the G-20 Summit in Japan, where the U.S. and Chinese presidents Donald Trump and Xi Jinping are set to meet to discuss the ongoing trade war between the two countries.

CEO and founder of Huawei, Ren Zhengfei, expects that the U.S. ban will cause a $30 billion decrease in revenue for the company over the next two years.

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