After blocking the sale of telecommunications equipment made by Chinese corporations such as Huawei, the United States has now decided to regulate even products that contain key components. The aim is to shut off the path for Chinese corporations to make a backdoor entry into the U.S. market through other manufacturers' products. U.S. technology restrictions on China are expanding beyond individual products to the entire supply chain.
According to Reuters on the 22nd (local time), the U.S. Federal Communications Commission (FCC) approved a rule banning new authorizations needed to enter the U.S. market for electronic devices that contain core hardware components from Chinese firms designated as national security risk corporations. Citing national security concerns, the FCC placed Huawei, ZTE and others on the Covered List, a list of telecommunications equipment and services corporations designated as national security threats, and has restricted sales of telecommunications equipment produced by these corporations. Since 2022, it has also banned new certifications so that equipment produced by the relevant corporations cannot newly enter the U.S. market.
At the time, however, products made by other manufacturers that contained Huawei components could enter the U.S. market. The FCC regarded this as the so-called "component part loophole." FCC Commissioner Brendan Carr said, "With this action, we have completely closed the component loophole," adding, "From now on, products that contain hardware components performing Huawei's logic and control functions will also be unable to receive U.S. market approval."
The U.S. expanded the scope of regulation to components on the view that key components can affect the security of an entire device. Chris McGuire, senior fellow for China and emerging technology at the Council on Foreign Relations (CFR), said, "In particular, if key components used in semiconductors or telecommunications devices are tampered with, they can be used to compromise the entire device." McGuire served as an official on the White House National Security Council (NSC) under the Joe Biden administration.
The move is seen as an extension of the Donald Trump administration's push to tighten restrictions on Chinese technology. Last month, the FCC banned the import of additional telecommunications equipment produced by national security risk corporations, and on the 21st it also proposed a plan to ban imports of most military-use drones. Recently, it restricted imports of new models of foreign-made drones and routers, and it is also pursuing a plan to prohibit interconnection between Chinese telecommunications companies designated as national security risk corporations and U.S. telecom operators.
Along with this, the FCC is also reviewing a plan to prevent Chinese telecommunications corporations that operate data centers and network points of presence (PoP) in the United States from interconnecting their networks with other carriers. If implemented, the corporations in question will likely have to effectively halt data center operations in the United States. As U.S. technology restrictions on China expand beyond finished goods to key components and telecommunications infrastructure, the U.S.-China competition for technological supremacy is expected to spread across the entire supply chain.