21:34 GMT09 August 2020
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    The ban on US federal agencies buying products and services from Huawei and other Chinese tech firms entered into force on Tuesday "for the purpose of public safety and other national security purposes." Washington has long accused the Chinese telecom giant of collaborating with Beijing authorities for illegal surveillance purposes.

    Huawei Technologies Co. has hired law firm Sidley Austin LLP as trade lobbyists to focus on export controls, trade sanctions “and other national security-related topics,” according to a disclosure filed with the US Senate, as Washington exerts increasing pressure on allies to join its blacklisting of the Chinese telecom giant, reports Bloomberg.

    The document testifies to the Chinese company’s deepening ties with the law firm, which is already working on the company’s legal cases in the US. It also shows Huawei's greater lobbying presence, which is believed to have started in July.

    Sidley Austin is already defending Huawei and a US affiliate against charges they defrauded at least four banks by concealing business dealings in Iran in violation of US sanctions.

    US prosecutors are seeking to disqualify the company’s lead lawyer in the case, James Cole, claiming his former role as the No. 2 at the Justice Department represents a “conflict of interest,” with a hearing scheduled for September.

    Ban on purchase of products and services from Huawei

    A document titled "Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment" entered into force Tuesday, banning 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, such as Huawei Technologies Company, ZTE Corporation or any of their subsidiaries and affiliates according to an entry on the US Federal Register website.
    The ban is installed "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.

    Huawei sales slump

    Huawei has been struggling as sales slowed dramatically against the backdrop of the escalating trade war with the US.
    Alphabet Inc.’s Google stopped providing Huawei with a version of its Android operating system, with the world’s second-biggest smartphone seller no longer able to pre-install Google’s popular apps, like Gmail and YouTube, on its devices.
    In response, the Chinese telecom company last week unveiled an in-house operating system, called HarmonyOS, claiming it can replace Android if Google’s software is barred from its future smartphones.

    US-China tit-for-tat measures

    Donald Trump and Chinese President Xi Jinping agreed at the G20 Osaka summit on 28–29 June to a 90-day truce that would halt the imposition of additional tariffs and re-launch trade negotiations.

    But a round of talks in Shanghai last month, between Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin failed to produce any breakthrough.

    In a sharp escalation of the trade spat between the two countries, the US President then pledged to impose a fresh 10% tariff on another $300 billion of Chinese goods, due to take effect on 1 September, while taking aim at Beijing for not honouring promises to buy more US agricultural products.

    China's Foreign Minister Wang Yi criticised the US move, on the sidelines of a meeting of South East Asian ministers in Bangkok, saying:

    "Adding tariffs is definitely not a constructive way to resolve economic and trade frictions, it's not the correct way."

    The Chinese Foreign Ministry said countermeasures would be installed if the US set in motion the tariffs hike.

    In a statement on 6 August the People's Bank of China slammed Washington's decision to designate China as a currency manipulator as the Asian currency nosedived to its lowest-ever level, breaching the seven yuan-per-dollar threshold.

    The statement followed US Secretary of the Treasury Steve Mnuchin announcing Washington had designated China a “currency manipulator”, citing alleged violations by Beijing and the PBOC of “China's G20 commitments to refrain from competitive devaluation”.

    US-China trade row

    Washington and Beijing have been embroiled in a trade dispute since June 2018, when Donald Trump announced he was imposing tariffs on $50 billion worth of Chinese imports in order to fix what he claimed was "unfair trade practices."

    In May, 2019 the US Commerce Department blacklisted Huawei and about 70 of its affiliates from purchasing US technology and doing business with US companies without relevant authorisation by the government.

    Washington accused the tech giant of collaboration with the Chinese military and intelligence, and use of their equipment for spying. The US also pressured other countries to give up using Huawei equipment and infrastructure for the new generation of 5G networks.

    In this Sept. 26, 2018, photo, signs promoting 5G wireless technology from Chinese technology firm Huawei are displayed at the PT Expo in Beijing. A spy chief said in a speech released Tuesday, Oct. 30, 2018
    © AP Photo / Mark Schiefelbein
    In this Sept. 26, 2018, photo, signs promoting 5G wireless technology from Chinese technology firm Huawei are displayed at the PT Expo in Beijing. A spy chief said in a speech released Tuesday, Oct. 30, 2018

    Beijing and Huawei have vehemently rejected all spying allegations, adding that the imposed restrictions could affect the company’s ability to provide services to clients in more than 170 countries across the globe.


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