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Trade war

US's ban on exports to Huawei adds 68 affiliates to blacklist

Restriction likely to ripple across supply chain stretching from Japan to Europe

The U.S. government's ban on American exports to Huawei also covers the Chinese technology maker's affiliates in Japan, Taiwan, Europe and the Middle East.   © Reuters

WASHINGTON -- The U.S. Commerce Department on Thursday announced a ban on exports of U.S. products to Huawei Technologies.

The penalty escalates the U.S.-China economic confrontation.

To prevent the Chinese telecommunications equipment giant from working around the rule through its affiliates, the ban also targets 68 of these companies around the world, including Japanese companies.

The Commerce Department added Huawei and 68 affiliates to the Entity List of foreign companies deemed to pose security risks. Producers that want to export products and software to companies on the list are required to obtain permission from the Commerce Department, which has stated that applications for these waivers will in general be denied.

The restriction targets Huawei's headquarters in China, related companies handling semiconductors and components within China as well as regional entities located in Japan, Taiwan, Europe, the Middle East and elsewhere.

This means a Japanese company, for example, can be subject to penalties from the U.S. government if it sells products using U.S. components or software to Huawei without U.S. approval.

The export ban not only delivers a blow to Huawei but to its suppliers of semiconductors and other products. It signals that tensions between the U.S. and China are not only intensifying around trade, but also over security.

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