US GOVERNMENT CONTRACTORS TOLD TO PROVE THEY HAVE NO HUAWEI TIES
Companies that provide the US government with goods and
services must certify that they do not use Huawei equipment or products from
other controversial Chinese groups, according to a new Trump administration
rule.
The Trump administration on Friday issued a rule requiring
companies to prove that they have no commercial ties with several Chinese
companies, including Huawei and Hikvision, a maker of surveillance cameras used
in the camps where China is detaining 1m Uighur Muslims.
Congress passed a law in 2018 introducing the measure, which
comes into effect next month. The administration has been working to create the
rule to help companies understand the scope and implementation of the law.
“All the largest tech companies in the world do business
with the federal government and will have to take stock,” said Eric Crusius,
partner at Holland & Knight, adding that it was incredibly expansive.
Companies that want to secure contracts with the US
government will now have to examine their businesses around the world to ensure
that they are in compliance with the law.
“This is in a different league because it covers every
government agency and covers acquisitions of all sizes,” said Mr Crusius, who
said it could even apply to companies that supply run-of-the-mill products such
as staplers.
I don’t think about it now
The measure illustrates how Congress and the Trump
administration are increasingly united over the need to take a tougher stance
on China and Chinese companies viewed as a security threat.
Some government agencies and companies had asked the
administration to take more time to implement the rule because of concerns over
how it would impact supply chains, but the White House decided to move ahead
with it.
“This is a rule that the Department of Defense wanted to
delay and industry wanted to delay,” said Mr Crusius. “Usually that is enough
but here the government went full steam ahead anyway.”
While Donald Trump, president, has at times taken a softer
stance on China in order to facilitate trade talks, he has adopted a harsher
approach more recently, as he blames Beijing for the global spread of
coronavirus.
His team has become increasingly critical of China over
everything from the detention camps in Xinjiang to the recent Chinese move to
impose a security law on Hong Kong to stamp out the pro-democracy movement.
Earlier this week, the US administration imposed sanctions
on several top Chinese officials over the situation in Xinjiang, and it has
also announced a number of restrictions on officials obtaining US visas in
recent weeks.
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Mr Trump on Friday said the US-China relationship was
“severely damaged” as he blamed Beijing for the spread of the virus, which he
has increasingly done as he has been castigated for his handling of the crisis.
Earlier this week, Wang Yi, China’s foreign minister, also
said China-US ties were facing their most serious challenge since diplomatic
relations were established more than four decades ago.
Speaking to reporters as he flew to Florida, Mr Trump
suggested he had abandoned hope of a phase two trade deal with China after the
limited “phase one” deal earlier this year. While few experts thought the
current environment would be conducive to talks, Mr Trump now appears resigned
to that fact.
“I don’t think about it now,” Mr Trump said about an issue
that he had previously touted as being important as he gears up to compete
against Joe Biden in November’s election. “Honestly, I have many other things
in mind.”
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