Feb 17, 2020 - World

WSJ: New trade limits on chips for Huawei could hurt U.S. company growth

This illustration is a yield sign with the Huawei logo on it
Illustration: Sarah Grillo/Axios

The Trump administration is weighing new trade restrictions that could force factories across the globe to obtain licenses if they want to use U.S. equipment to make chips for Huawei products, the Wall Street Journal reports.

Why it matters: The restrictions "risk disrupting the global supply chain for semiconductors and dent growth for many U.S. companies," the WSJ reports, citing unnamed U.S. industry participants. One goal of the proposed restrictions is for China to see the action as a threat, per the WSJ.

Driving the news: House Speaker Nancy Pelosi on Sunday cautioned U.S. allies against allowing Huawei to develop their 5G networks, in the latest addition to the U.S. pressure campaign on the telecommunications giant.

Where it stands: The Commerce Department's proposed restrictions were only recently proposed after weeks of discussion, WSJ reports, and "not everyone within the administration supports the idea."

Go deeper: Huawei equipment has secret "back doors," U.S. officials claim

Editor's note: This article has been corrected to clarify that the rules cover firms making chips for Huawei products (not Huawei chips).

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