Dread over impending anti-Huawei law grows at US companies

Section 889, part B, of the National Defence Authorisation Act requires US government contractors to ensure their global supply chain is devoid of gear from banned Chinese tech firms

More than a dozen industries are engaged in a lobbying frenzy ahead of an August 13 deadline to comply with that far-reaching provision

Reading Time:4 minutes

The National Defence Authorisation Act puts the onus on US government contractors to comb through all their businesses to ensure they have no connections to Huawei and other banned Chinese technology companies. Photo: Reuters

Published: 6:37pm, 10 Jun 2020Updated: 6:37pm, 10 Jun 2020

A quiet panic is spreading in Washington and corporate boardrooms that a law taking effect in two months, which bans Huawei Technologies gear, will threaten the business of government contractors.

Aerospace, information technology, car manufacturing and a dozen other industries are engaged in a lobbying frenzy ahead of an August 13 deadline to comply with a far-reaching provision that was tucked into a defence spending bill two years ago.

The broadly written defence law could implicate virtually all companies that count the federal government as a customer, including global subsidiaries and service providers deep in a firm’s supply chain. Excluding subcontractors, more than 100,000 companies provided US$598 billion in goods and services directly to the US government last year, according to a Bloomberg Government tally.

To date, measures taken by the Trump administration against Huawei and other Chinese technology companies have been aimed at cutting off their access to American components and networks. This law would ratchet up the pressure even more, putting the onus on US government contractors to comb through their businesses to ensure they have no connections to banned Chinese companies.

Known by the wonky name of Section 889, part B, of the National Defence Authorisation Act, the law would require companies to certify that their entire global supply chain – not just the part of the business that sells to the US government – is devoid of gear from telecommunications equipment vendors Huawei and ZTE Corp, surveillance systems provider Hangzhou Hikvision Digital Technology and other Chinese surveillance companies.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x