To put it kindly, Huawei has had a complicated relationship with the United States government, culminating in their addition to the Entity List after the company had dealings with Iran, which is sanctioned by the US government.The US extended the Huawei ban earlier this week, but now the restrictions have been expanded.
Now, the US Department of commerce has moved to further restrict “Products Designed and Produced with U.S. Technologies”. Since Huawei has been added to the Entity List, they have undermined those restrictions by continuing to use US technology in its production of semiconductors which go into their chipsets. Any silicon produced today is exempted from the new restrictions as long as they are delivered within the next 4 months.
You can read the full announcement from the Department of Commerce here.
This comes after Huawei has had to ship smartphones without Google apps such as Gmail, YouTube, or the Play Store.
As a reaction to this news, China has said they will retaliate by increasing scrutiny on US companies such as Apple, Boeing, Cisco, and Boeing. This includes imposing restrictions and launching investigations, and in the case of Boeing, completely suspending airplane purchases.