Washington halts licences for US companies to export to Huawei

The Biden administration has suspended licensing US companies to export to Huawei as it moves toward imposing a blanket ban on the sale of American technology to the Chinese telecommunications equipment giant.

The commerce department has notified some companies that it will no longer grant licenses to any groups that export American technology to Huawei, said multiple people familiar with the administration’s internal discussions.

The move marks the latest in Washington’s campaign to clamp down on the Shenzhen-based technology company, which US security officials believe helps China engage in espionage. Huawei denies any involvement in espionage.

The Trump administration in 2019 imposed strict restrictions on exporting American technology to Huawei by adding the group to a blacklist called the “entity list”. The move was part of a strategy to crack down on Chinese companies that Washington believed posed a risk to US national security.

But the commerce department continued to grant export licenses to some companies, including Qualcomm and Intel, to supply Huawei with technology unrelated to the high-speed 5G telecom network.

Over the past two years, President Joe Biden has taken an even tougher stance on China, particularly in the area of ​​cutting-edge technology. In October, it imposed severe restrictions on the supply of advanced semiconductors and chipmaking equipment to Chinese groups.

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Alan Estevez, the head of the Commerce Department’s Bureau of Industry and Security, is leading a review of China-related policy to determine what steps the administration should take to make it more difficult for the Chinese military to use U.S. technology to develop weapons.

Martijn Rasser, a technology expert at CNAS, a think-tank, said the latest action was a “really important move”.

“The Commerce Department’s action is partly driven by the fact that Huawei as a company is a very different animal than it was 4 years ago when it was focused on 5G,” said Rasser, a former CIA official. , a former CIA official, referred to its expansion in. areas such as submarine cables and cloud computing.

Washington’s move comes as Huawei’s operations have stabilized. Eric Xu, the company’s rotating chair, said in December that 2023 would be the first year in which Huawei would return to “business as usual”. According to the company, its 2022 revenue was flat at 636.9bn Rmb ($94bn), after a rapid decline in 2021.

The company has ensured its survival with a shift to corporate and government business, especially in China, and its growing cloud business. The fact that the US still allows some exports to Huawei also helped avoid a complete collapse. Huawei is believed to be supporting projects in China aimed at building an independent semiconductor supply chain, an effort Washington has also begun targeting.

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Industry insiders said it was too early to assess the impact of the latest measures on Huawei. “An indefinite blanket shutdown would naturally be catastrophic for Huawei, but the result of anything that could not be quite different,” said a legal expert involved in the export license application.

An executive at a semiconductor design house that has worked with Huawei said changes would come when the export license expires. “Since there are no details regarding which licenses were granted and when public, it becomes difficult to predict,” the person said.

Paul Triolo, a China technology expert at Albright Stonebridge consultancy, said the commerce department was likely to revoke all previous licenses granted to Huawei exports.

“This will have a major impact on the income of US suppliers for mainly semiconductor commodities,” said Triolo, adding that the department took action partly out of concern about a congressional review of its policies by the Republican House. led

Secretary of State Antony Blinken is preparing to travel next week to China, the first visit by a Biden cabinet member to the country.

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The United States is also stepping up efforts with its allies to slow China’s push to develop cutting-edge technologies such as semiconductors used for artificial intelligence, nuclear weapons prototypes and hypersonic weapons development.

Washington last week reached an agreement with Japan and the Netherlands to restrict companies in those countries from exporting certain chipmaking equipment to China. In October, the United States imposed unilateral restrictions to prevent American companies from exporting semiconductor manufacturing tools.

Estevez last year suggested that the United States was looking at a number of other areas. Asked about reports that the administration was considering restrictions on biotechnology and biotechnology, he told the CNAS think-tank: “If I were a betting man, I’d put money on it.”

A formal decision on whether or not to implement a total ban on exports of US chips and technology to China has not yet been made.

The Commerce Department declined to comment but said the agency, along with other government departments, would “continually evaluate our policies and regulations and regularly communicate with external stakeholders.”

Huawei did not immediately respond to a request for comment.

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