The Biden administration has revoked eight licenses this year that had previously allowed some companies to ship goods to Chinese telecoms equipment giant Huawei. This action, first reported by Reuters, is part of a broader effort to exert pressure on the resurgent company.
The Commerce Department, which oversees U.S. export policy, stated in May that it had revoked “certain” licenses but did not specify the names or number of suppliers affected at that time. However, it was later revealed that licenses for major companies like Qualcomm and Intel were among those revoked.
| Company | License Status | Comment |
|---|---|---|
| Qualcomm (QCOM.O) | Revoked | No response |
| Intel (INTC.O) | Revoked | Declined to comment |
| Huawei (HWT.UL) | N/A | Denies being a security risk |
- The Commerce Department has revoked eight additional licenses involving Huawei since the beginning of 2024.
- These licenses included approvals for items such as exercise equipment, office furniture, and low-technology components like touchpad and touchscreen sensors for tablets.
- The items are widely available in China from both Chinese and foreign sources.
The information was disclosed in a document prepared in response to an inquiry by Republican Congressman Michael McCaul. The House Foreign Affairs Committee, chaired by McCaul, received the data and is currently reviewing it.
The revocation of these licenses is part of a broader strategy by the Biden administration to counter Huawei’s resurgence. Despite Washington’s efforts to cripple the company on national security grounds, Huawei has started to bounce back. The company has consistently denied allegations that it poses a security risk.
The pressure from Republican China hardliners in Congress has been significant, especially following Huawei’s unveiling of a new phone last August. This phone, powered by a sophisticated chip manufactured by Chinese chipmaker SMIC, defied U.S. export restrictions on both companies. The new device contributed to a 64% year-on-year increase in Huawei smartphone sales in the first six weeks of 2024, according to research firm Counterpoint.
Huawei’s smart car component business also played a role in the company’s resurgence, helping it achieve its fastest revenue growth in four years in 2023.
- In August, Huawei launched a new phone powered by SMIC chips, boosting sales by 64% year-on-year.
- Huawei’s smart car component business has contributed to its financial growth.
Huawei’s Troubles with U.S. Trade Restrictions
Huawei was placed on a U.S. trade restriction list in 2019 amid concerns that it could spy on Americans. Being on this list means that Huawei’s suppliers must seek a special, difficult-to-obtain license before shipping goods to the company. Despite these restrictions, Huawei suppliers have received licenses worth billions of dollars to sell goods and technology to the company. This was made possible by a policy introduced by the Trump administration, which allowed a much broader range of items to flow to Huawei than is typical for an entity-listed company.
From 2018 to 2023, the Commerce Department approved $335 billion worth of licenses out of a total $880 billion applications seeking permission to sell to Chinese parties on the entity list. Notably, $222 billion worth of approvals came in 2021, Biden’s first year in office, out of $560 billion in applications received that year.
- Total license applications (2018-2023): $880 billion
- Approved licenses (2018-2023): $335 billion
- Applications in 2021: $560 billion
- Approvals in 2021: $222 billion
The summary highlights that despite the stringent measures, a significant amount of trade still flows to Huawei and other entity-listed companies.
The continued revocation of licenses and tightening of export controls indicate the U.S. government’s commitment to countering Huawei’s influence and technological advancements. This strategy is likely to persist as long as concerns over national security and technological dominance remain.
- The Biden administration’s measures are part of a long-term strategy to curtail Huawei’s technological advancements.
- The revocations are expected to impact Huawei’s supply chain and technological development, especially in critical areas like semiconductors.
The U.S. government’s approach to Huawei and other Chinese tech firms reflects a broader geopolitical struggle for technological supremacy. As the situation evolves, companies and stakeholders in the tech industry will need to navigate these complex regulatory landscapes carefully.
Featured Image courtesy of NPR