Commerce Department Escalates US-China Technology Competition, Targeting Huawei Again

On May 15, 2020, the US Department of Commerce announced a rule further targeting Chinese telecommunications company Huawei and its chip-making subsidiary HiSilicon for allegedly engaging in "stepped-up efforts to undermine" last year's addition of Huawei and 114 of its affiliates to the Entity List.

This action is the latest in a series of escalating trade restrictions that especially impact the global semiconductor industry. Increasingly, US and non-US companies alike are facing difficult choices about their supply chains and their customers.

The new interim rule, which took immediate effect May 15, 2020, amends the so-called Direct Product Rule for determining when foreign-made items may nonetheless be subject to the US Export Administration Regulations (EAR). The Direct Product Rule restricts exports and reexports of some foreign-produced items that are the direct products of certain controlled US-origin technology, software, a complete plant or any major