As part of its continued efforts to normalize trade relations with China, the US government has reportedly withdrawn proposed regulations that would have made it harder for companies in the country to conduct business with Huawei. That’s according to The Wall Street Journal, which claims that various arms of the US government, including the Defense and Treasury Departments, are against the idea of continuing with sanctions against the Chinese tech giant.

The change in stance reportedly comes in spite of the Commerce department’s persistent efforts to not only continue on with the Huawei ban, but actually impose further sanctions because of alleged non-competitive practices and security threats. According to the report, the US defense establishment is concerned about losing revenues from sales to the Chinese company, depriving them of a massive chunk of their R&D funding.

Talking to reporters at an event in Washington over the weekend, the country’s Defense Secretary, Mark Esper, said that the decision on whether to persist with the hardline policy against Huawei must take into account all sides of the story. According to him: “We have to be conscious of sustaining those (technology) companies’ supply chains and those innovators. That’s the balance we have to strike”.

The decision has already raised the hackles of many in the political and security establishment within the US. A number of leading lawmakers in the country have already sent a letter to Esper opposing the decision and accusing the company of being an extension of the country’s communist regime and urging the government to refrain from normalizing trade relations with it.

According to the letter from Senators Ben Sasse, Tom Cotton and Marco Rubio, “Huawei is an arm of the Chinese Communist Party and should be treated as such”. It will be interesting to see whether the hardliners will win out in the end, or if cooler heads will prevail and the global markets will heave a sigh of relief.