The Department of Commerce has decided to withdraw its proposed rules that would further restrain U.S. companies from selling chips and other electronics to China-based Huawei Technologies through their facilities overseas after Commerce faced objections from the Department of Defense, The Wall Street Journal reported Friday.
Sources said DoD is concerned that such regulations would deprive U.S. firms of revenue and funds needed to invest in research and development and keep the country’s technological edge.
“We have to be conscious of sustaining those [technology] companies’ supply chains and those innovators,” Mark Esper, DoD secretary and a 2020 Wash100 award recipient, said when asked about the publication’s report on the Pentagon’s action. “That’s the balance we have to strike.”
People with knowledge of the matter said the Department of Treasury also expressed objections to Commerce’s move and one source noted that the agency wanted Secretary Steven Mnuchin to have a chance to share his views on the matter.
The report said cabinet officials are expected to meet in the coming weeks to discuss Huawei and other concerns related to China.