United States plans to finalize regulations that will bar the US government from buying goods or services from any company that uses products from five Chinese companies including Huawei, Hikvision and Dahua, Reuters reported.
The rule, which was prompted by a 2019 law, could have implications for companies that sell goods and services to the US government since they will now need to certify they do not use products from Dahua or Hikvision, though both are among the top sellers of surveillance equipment and cameras worldwide.
Business conditions for two-way radios from Hytera and telecommunications equipment or mobile devices like smartphones from Huawei Technologies or ZTE will be tough in the future, the report indicated.
Any company that uses equipment or services in their day-to-day operations from these five companies will no longer be able to sell to the U.S. government without getting a US government waiver.
“The danger our nation faces from foreign adversaries like China looking to infiltrate our systems is great,” said Russ Vought, acting director of the White House Office of Management and Budget in a statement to Reuters.
“The Trump Administration is keeping our government strong against nefarious networks like Huawei by fully implementing the ban on Federal procurement.”
The US government annually awards more than $500 billion in contracts, according to the Government Accountability Office.
The rule from the Federal Acquisition Regulatory Council will take effect on August 13.
Amazon.com, for example, received 1,500 cameras to take temperatures of workers during the coronavirus pandemic from Zhejiang Dahua Technology in April.
Amazon’s cloud unit is a major contractor with the U.S. intelligence community, and it has been battling Microsoft for an up to $10 billion cloud computing deal with the Pentagon.
The official said the administration will require agencies to conduct a national security analysis before they grant any waivers, something Congress did not expressly require in the statute.
The rule is aimed at more than just barring government agencies from using products from Huawei and other named Chinese firms, but is a bid to limit their influence and it essentially gives companies a choice: do business with the U.S. government or with the Chinese firms.
Last year, United States placed Huawei, Hikvision and other firms on its economic blacklist, barring the firms from buying components from U.S. companies without U.S. government approval.
On June 30, the Federal Communications Commission designated Huawei and ZTE as posing threats to US national security, a declaration that bars U.S. firms from tapping an $8.3 billion government fund to purchase equipment from the companies.