US ban on state contracts with Huawei, other Chinese tech companies takes effect

The document titled "Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment" bans certain US state agencies, namely the Defense Department, General Services Administration and NASA, from purchasing equipment and services from a number of Chinese tech companies effective on Tuesday.

The ban covers the telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation or any of their subsidiaries and affiliates, as well as the video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company and Dahua Technology Company "for the purpose of public safety, security of Government facilities, physical security surveillance of critical infrastructure, and other national security purposes."

Heads of the federal agencies can request a one-time waiver to the new rule for a period of no longer than two years and not beyond August 13, 2021 upon submitting a detailed justification for the request to the appropriate congressional committees. In all other circumstances, the waiver can be granted only by the Director of National Intelligence.

The United States accuses Huawei of collaboration with the Chinese military and intelligence and use of their equipment for illegal surveillance purposes. Washington has also launched a campaign for other countries to give up using Huawei equipment and infrastructure for the new generation of 5G networks.

In May, the US Commerce Department blacklisted Huawei and about 70 of its affiliates from purchasing US technology and doing business with US companies without relevant authorization by the government. A temporary exemption was obtained by Google to supply the Chinese tech giant with an OC Android software update and is due to expire on August 19.

Huawei has rejected the allegations, adding that the restrictions could affect the company’s ability to provide services to clients in more than 170 countries across the globe.

The ban comes in the wake of trade war between the United States and China over the past year. The sides have exchanged several rounds of duties on billions of dollars worth of imports and so far have not fully overcome their differences in multiple trade talks.