Critical Calls for a Tech Export Ban: Huawei and SMIC in the Crosshairs

In a significant development, Representative Mike Gallagher, the chair of the House of Representatives’ committee on China, has urged the U.S. Commerce Department to cease all technology exports to Huawei and China’s leading semiconductor firm, SMIC. This call comes on the heels of alarming revelations about new chips in Huawei phones that may infringe upon trade restrictions.

The Mate 60 Pro and the Suspect Chip: Chinese tech giant Huawei recently launched the Mate 60 Pro smartphone, drawing attention due to a mysterious chip within it. Analysts suspect that this chip may have been manufactured with the help of technology breakthroughs from Semiconductor International Manufacturing Corp (SMIC).

Potential Violation of Trade Rules: Representative Gallagher expressed concern that this particular chip may not have been possible without the use of U.S. technology, potentially putting SMIC in violation of the Department of Commerce’s Foreign Direct Product Rule. He emphasized the need to halt all U.S. technology exports to both Huawei and SMIC as a stern message against any entity flouting U.S. law and jeopardizing national security.

Background on Huawei and SMIC: Huawei found itself on a trade blacklist in May 2019 due to national security apprehensions. This decision compelled its U.S. suppliers and others to obtain special licenses for shipping goods to the company. On the other hand, SMIC was added to the “entity list” in December 2020, amid concerns that it might divert advanced technology towards military applications.

Trade Restrictions and the Foreign Direct Product Rule: The trade restrictions imposed on Huawei and SMIC included the Foreign Direct Product Rule, which aims to prevent any company worldwide from using U.S. tools to produce chips for Huawei.

Loopholes in Trade Regulations: Notably, despite their presence on trade lists, suppliers to Huawei and SMIC have received licenses worth billions of dollars for selling U.S. technology to these companies. Shockingly, approximately 90% of these licenses were issued for sales to SMIC.

Call for Action: As this critical situation unfolds, the U.S. Commerce Department’s bureau overseeing export controls has yet to respond to the urgent call for action. Representative Gallagher’s demand to cut off technology exports to Huawei and SMIC seeks to underscore the United States’ commitment to upholding its laws and safeguarding national security.

Conclusion: The growing concerns surrounding Huawei, SMIC, and the suspected technology violations necessitate immediate attention from the U.S. government. With the call to cease all technology exports to these entities, Representative Gallagher highlights the significance of protecting U.S. interests while sending a clear message about the enforcement of trade restrictions and national security measures. The world watches closely as this critical issue unfolds.