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The Trump administration is working this week to finalize regulations to bar the United States government from purchasing goods and services from companies using products from Huawei and four other Chinese companies, including Hikvision and Dahua, reports Global News.
The rule will have a large impact on companies providing the US government with goods and services as they will have to verify that they aren’t using products from these companies—though some of them are among the world's top sellers in cameras and surveillance equipment. The rule will take effect on August 13.
The news follows rising tensions between China and the US over China’s handling of the coronavirus outbreak, a trade war lasting nearly two years, as well as China’s actions in Hong Kong.
Companies using services or equipment from the five Chinese companies will require a government waiver to sell to the US government.
The White House says that the rule won’t be delayed in being enacted and it could be difficult to get waivers. A national security analysis will have to be conducted by agencies before a waiver is granted by the administration.
Over $500 billion in contracts are awarded by the US government every year, according to the Government Accountability Office.
"The danger our nation faces from foreign adversaries like China looking to infiltrate our systems is great," noted acting director of the White House Office of Management and Budget, Russ Vought.
"The Trump Administration is keeping our government strong against nefarious networks like Huawei by fully implementing the ban on Federal procurement."
It is still unclear as to whether the rule will be enforced on current contracts. For example, in April, Amazon.com Inc used 1,500 cameras from Zhejiang Dahua Technology Co. Ltd. to take worker's temperatures.
Amazon has been working against Microsoft to land the Pentagon’s cloud computing deal worth as much as $10 million.
An official familiar with the rule said it intends to limit the influence of these Chinese firms and will allow companies to choose whether they want to continue doing business with the Chinese companies or the US government.
Huawei and Hikvision were among some of the companies placed on the US government’s economic blacklist which requires them to gain the government’s approval before purchasing components from US companies.