The White House Office of Management and Budget is seeking an extension to implement the ban on working with Huawei, the Chinese telecom company.
Reuters, citing the White House Office of Management and Budget, reported the government needs two more years to issue the rules that require third-party vendors and contractors to not purchase or use equipment of the Chinese company. “This is about ensuring that companies who do business with the U.S. government or receive federal grants and loans have time to extricate themselves from doing business with Huawei and other Chinese tech companies listed in the NDAA,” Jacob Wood, a spokesman for the White House OMB, said in a statement to Reuters. The report noted that acting OMB Director Russ Vought requested the delay in a letter to congressional leaders and Vice President Mike Pence last week. Vought said in the letter the extension would “ensure the effective implementation of the prohibition without compromising desired security objectives,” reported Reuters. He said that without the delay there will be a “dramatic reduction” in the number of vendors that could sell to the government of the U.S. He wants the ban on government contractors purchasing Huawei equipment to kick off in four years instead of two.
That delay wouldn’t stop the blacklisting of Huawei, which the Commerce Department did in May. That ban prevents American companies from buying parts and equipment from Huawei without the approval of the U.S. government. President Trump also signed an executive order in May that prevents U.S. companies from using Huawei equipment, citing a national security risk.
In a recent interview with Reuters, Huawei Chief Executive Ren Zhengfei said the move by the White House will hurt the lead Huawei has built over the past two years. He added that the company will ramp up its chip supply, or find other options to remain ahead in the smartphone and 5G markets.