"The U.S. can allow some companies to sell to Huawei while ultimately holding the cards".
The concern is that tension could escalate into a full-blown trade war that would damage the global economy.
Chinese tech giant Huawei has slammed Washington's decision to ban it from the American market, noting that the move will only hurt Americans and leave the USA behind in deploying the 5G telecommunications technology.
The Commerce Department said Wednesday evening that the restrictions would "prevent American technology from being used by foreign owned entities in ways that potentially undermine US national security or foreign policy interests".
A Government row with the USA over Huawei was reignited last night after a Cabinet minister said the United Kingdom would not be swayed by Donald Trump's decision to effectively ban the Chinese firm.
U.S. suppliers to China-based Huawei would be affected quickly if a ban on exporting hardware and services proposed by the U.S. Commerce Department on Wednesday goes into effect.
"When Chinese companies are wrongly treated, China has the right to take necessary measures to safeguard its legitimate rights and interests", the spokesperson said, adding that his country "always asks its companies to comply by local laws and regulations when they operate overseas".
The U.S. Department of Commerce on Wednesday announced that it will add Huawei and its affiliates to the Entity List of the department's Bureau of Industry and Security, restricting the sale or transfer of American technology to Huawei.
Companies should immediately take measures to curtail the sale or transfer of USA -origin products and technology to Huawei and its affiliates.
"Instead, this will only serve to limit the USA to inferior, yet more expensive alternatives, leaving it lagging behind in 5G deployment and eventually harming the interests of U.S. companies and consumers". Ironically, numerous computer chips, memory and other components it gets from USA companies are made in China, said Roger Entner, founder of telecom research firm Recon Analytics.
This will make it hard for Huawei to sell some products because of its reliance on US-made parts, and could potentially put its use of the Google Play store and Google apps on Android devices in jeopardy.
If fully implemented, the move would "quickly put at risk both the company itself and the networks of Huawei customers around the world", said Paul Triolo, a tech analyst at Eurasia Group. Commerce's announcement connects Huawei's addition to the Entity List to violations of USA sanctions against Iran alleged in the DOJ indictment against Huawei earlier this year.
In what some have compared to the Cold War arms race, the United States is anxious that 5G dominance would give any global competitor such as China an advantage Washington is not ready to accept. The company has denied the allegations. He also announced plans to meet Chinese President Xi Jinping at a G20 summit in Japan late next month. As a result, sale or transfer of American technology to a company or person on the Entity List requires a license issued by the BIS, and a license may be denied if the sale or transfer would harm USA national security or foreign policy interests.
Foreign ministry spokesman Lu Kang, asked if China had invited USA officials for more talks, said China always advocated resolving disputes through dialogue.
"Negotiations and consultations, to have meaning, must be honest", Lu told reporters at a separate daily briefing.
"First, there must be mutual respect, equality and mutual benefit. Second, one's word must be kept, and not be capricious".
Given the assumptions that had underlaid globalization and U.S. -China trade war stalled last week, the United States ramped up the pressure by raising tariffs on a list of $200 billion worth of Chinese imports to 25% from 10%.
Markets have swung wildly in recent weeks as trade tensions between the US and China intensified.
The EU imposed import duties of 25% on a $2.8 billion range of imports from the United States in retaliation for USA tariffs on European steel and aluminum. It said the United States would be limited to low quality, yet more costly, mobile systems. We urge the U.S. to stop such practice and create favorable conditions for business cooperation.
ENERGY: Benchmark U.S. crude advanced 70 cents to $62.73 a barrel in electronic trading on the New York Mercantile Exchange while Brent crude, the global standard, added 64 cents to trade at $72.41 per barrel. "While the intent is to punish Huawei, ultimately, United States companies are also being penalised", he said, adding that the likelihood that the Commerce Department will grant licences to allow sales is negligible.