Hidden consequences of U.S. chips act
XINHUAAug 26, 2022
In line with US Pres. Biden's tightening restrictions on China, the US government has stopped approving export licenses for American firms to export most items to Chinese technology company Huawei.
The company has faced US export restrictions for years — particularly regarding 5G technology — but officials in the US Dept. of Commerce have still granted occasional licenses for some American firms to sell select goods. For example, Qualcomm was permitted to sell 4G smartphone chips in 2020.
US policies are an unreasonable suppression of Chinese companies. Since Huawei and other companies are not a national security threat to the US, this move violates international economic and trade rules. Policies like this create supply chain inefficiencies, disrupt globalization, and have hidden consequences for the world economy.
Huawei poses a huge threat not just to American commercial activities but also to national security since the company has strong ties to PRC government agencies. Chinese laws require businesses to work with Chinese intelligence and security agencies whenever they are requested, and there have been several allegations of Huawei engaging in espionage activities. Restricting exports to the company is necessary to protect American financial and security interests.