The Trump administration thought about removing China’s Huawei from the U.S. financial network earlier this year, Reuters exclusively reported on Tuesday (Dec. 3), citing three sources.
The move, which was scrapped, is the most aggressive U.S. sanctioning tool. It was one of several policy alternatives intended to hinder Huawei, the sources said. If it had been implemented, the plan would have put the tech giant on the Treasury Department’s Specially Designated Nationals (SDN) list.
White House officials held interagency meetings about the measure and even drafted a memo, one source told Reuters. Instead, Huawei was added to a trade blacklist, which requires some firms to get a special license in order to sell.
A source familiar with the matter, who favors the ban, told Reuters the original plan could be restored “depending on how things go with Huawei.”
If Huawei was put on the SDN list, it would have been one of the biggest firms ever added it. The list has included Russia’s Rusal — the world’s second-largest aluminum company — Russian oligarchs, Iranian politicians and Venezuelan drug traffickers.
The designation makes it “virtually impossible” for a company to do business in U.S. dollars.
When asked about the Reuters report during a CNBC interview on Tuesday (Dec. 3), U.S. Commerce Secretary Wilbur Ross said the U.S. is “always considering all sorts of measures against all kinds of companies. But I don’t believe there’s anything imminent this morning on that.”
In May, the White House placed Huawei on an Entity List that cut it off from U.S. technology and essential components over fears of spying from the company’s 5G technology and infrastructure. Huawei has vehemently denied those claims. Huawei said in August that revenue loss from U.S. trade restrictions is estimated to be about $10 billion, which is $20 billion less than initially feared.
Huawei has seen a jump in sales from not only promotions but patriotic purchases in China. It’s almost a third above a year ago this quarter, to a record high.