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US pulls rule that would have made it harder for American companies to sell to Huawei

US pulls rule that would have made it harder for American companies to sell to Huawei


The Pentagon objected to the new rule

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Illustration by Alex Castro / The Verge

The US Department of Commerce has pulled a potential regulation would have made it more difficult for US companies to sell to Huawei, according to sources who spoke with the Wall Street Journal, after the Pentagon and Treasury Department protested the rule.

Right now, US companies can sell chips or other electronic goods to Huawei from their overseas locations without an export license as long as those goods are made with less than 25 percent of materials or patents that aren’t made by US companies.

However, the Commerce Department had proposed a new rule to the Office of Management and Budget (OMB) that would have lowered that percentage to 10 percent. The Pentagon apparently objected to that change because it believed it would hurt US companies by limiting how much they could sell to Huawei, and the Commerce Department pulled the rule from the OMB.

Huawei remains effectively blacklisted by the US after President Trump declared an executive order last May that barred American businesses from working with the company without a license from the US government. That means, for example, that Google can’t license Android to Huawei to use on Huawei phones. But some companies still do sell to Huawei in part, and the rule that was just pulled by the Commerce Department would have made selling to Huawei even more difficult than it already is.

Huawei and the Department of Commerce didn’t immediately respond to requests for comment.