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Pentagon blocks new rule that would stop Huawei buying from US companies

Pentagon blocks new rule that would stop Huawei buying from US companies
(Image credit: Huawei)

According to the Wall Street Journal, the US Department of Commerce has pulled a proposed rule that would have made it difficult for US companies to sell to Huawei, after pressure from the Pentagon of all places. Huawei currently makes some of the best smartphones on the market, but would have found it increasingly hard to trade in the US, so this rule could have been a major blow to consumers.

As things currently stand, US companies call sell electronic goods to foreign companies like Huawei from overseas locations without needing an export license on the proviso that that goods are made with less than 25% foreign materials and/or patents. So basically, you don’t need an export license if the thing you’re selling to Huawei is mostly American.

The Commerce Department was looking to shake things up though, by introducing a new rule that would have thought that percentage down to just 10% - meaning the products would need to be made from 90% US materials and patents. The Pentagon and Treasury Department blocked the move because it would put limits on US businesses, not just Huawei, since they would no longer be able to sell electronic components to the Chinese smartphone giant.

But while this new rule has been blocked, Huawei’s troubles in the US are far from over. President Trump passed an executive order that banned US companies from working with Huawei unless they have a license from the US government. While a few businesses are still trading with Huawei, the vast majority have been blocked, including Google who can no longer supply its Android OS to new Huawei smartphones.

Trump vs Huawei

Today’s news is a blow for the President’s campaign against Huawei. The Trump administration has been leaning heavily on its allies in the United Kingdom to ban Huawei from its 5G network, seemingly unsuccessfully. Other countries have cooled off on their relationship with the Chinese firm though. Huawei’s handsets have been exceptionally popular in the last few years, so these current trade disputes are leaving many Americans feeling uncertain about their smartphone future.

If you’re looking for a new smartphone, we recommend you hold off on a Huawei purchase until this dispute has been resolved. If you need a new plan, you should check out our best cell phone providers guide to help you out.