According to sources who spoke with the Wall Street Journal, after the Pentagon and Treasury Department objected to the rule, the U.S. Department of Commerce withdrew a proposed regulation that would have made it harder for U.S. companies to sell to Huawei.
Right now, U.S. firms can sell chips or other electronic goods to Huawei from their overseas locations without an export license as long as those goods are made from less than 25% of the materials or patents not made by U.S. manufacturing companies.
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The Department of Commerce, however, had introduced to the Office of Management and Budget (OMB) a new rule that would have lowered the amount to 10%. The Pentagon objected to that change because it believed that by limiting how much they could sell to Huawei, it would hurt U.S. companies, and the Department of Commerce pulled the OMB rule.
Huawei remains permanently blacklisted by the U.S. after President Trump last May signed an executive order banning American businesses from working with the company without a U.S. government permit. For example, this means that Google can not license Huawei to use Android on Huawei phones. But some companies already partially sold to Huawei, and the regulation just removed by the Department of Commerce would have made selling to Huawei much harder than it already is.
Huawei and the Department of Commerce did not immediately respond to requests for comment.