A new interim rule issued by the US Department of Defense, the General Services Administration and the National Aeronautics and Space Administration comes into effect today, banning federal agencies from buying or obtaining any equipment, systems or services from the Chinese telecom company Huawei.
The crackdown on Huawei comes after long standing accusations against the Chinese government of surveillance, espionage and the theft of US intellectual property. Huawei denies the accusations and seeks to challenge the ban’s constitutionality.
Termed as a “security threat measure”, this ruling further confirms the increasingly inflammatory economic and security relationship between both countries. Since the start of August, relations have worsened further. Washington recently announced new 10% tariffs on $300 billion worth of Chinese imports. Soon after, the Chinese Ministry of Commerce on 5 August halted the purchase of US agricultural products as a retaliatory measure. Since then, US President Donald Trump has threatened to cancel the face-to-face trade talks with Chinese President Xi Jinping, scheduled for September.
Tariffs increase the risk of a prolonged trade war, dragging down economic growth worldwide and potentially ushering in a global recession in the next 12 months.
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