The Biden administration has stopped granting US companies licenses to export to Huawei as it moves towards imposing a total ban on sales of American technology to the Chinese telecom equipment giant.
Several people familiar with discussions within the administration said the trade department had told some companies that it would no longer issue licenses to groups wishing to export American technology to Huawei.
The move marks the latest move in Washington’s campaign to contain the Shenzhen-based tech company that US security officials believe is helping China spy. Huawei denies any involvement in espionage.
The Trump administration imposed severe restrictions on exports of American technology to Huawei in 2019 by blacklisting the group 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.
However, the trade department continued to issue export licenses for some companies, including Qualcomm and Intel, to provide Huawei with technology unrelated to high-speed 5G telecom networks.
In the past two years, President Joe Biden has taken an even tougher stance on China, particularly on high technology. In October, he imposed sweeping restrictions on the supply of advanced semiconductor and chip-making equipment to Chinese corporations.
Alan Estevez, head of the Trade Department’s Industry and Security Office, led a review of China-related policies to determine steps the government should take to make it more difficult for the Chinese military to use US technology to develop weapons.
Martijn Rasser, technology expert at CNAS, a think tank, said the latest action was a “really significant step”.
“The trade department’s actions are partly because Huawei as a company is a very different beast than it was four years ago when it focused on 5G,” said Rasser, a former CIA official, referring to its expansion into areas like Submarine Cables and Cloud Computing.
Washington’s move comes as Huawei’s operations have stabilized. Eric Xu, the company’s rotating chairman, said in December that 2023 will be the first year Huawei will return to “business as usual.” According to the company, revenue remained flat at Rmb 636.9 billion (US$94 billion) in 2022 after a steep decline in 2021.
The company ensured its survival with a shift to enterprise and government businesses, particularly in China, and its growing cloud business. The fact that the US still allowed some exports to Huawei also helped avert a full-scale collapse. Huawei is believed to be backing projects in China aimed at building an import-independent semiconductor supply chain, efforts Washington is also targeting.
Industry insiders said it’s too early to assess the impact of the recent measures on Huawei. “A blanket freeze indefinitely would of course be catastrophic for Huawei, but anything else could turn out very differently,” said a legal expert involved in export license applications.
An executive at a semiconductor design house that has worked with Huawei said the change would come when export licenses expire. “As no detail is known about what licenses have been granted and when is public, this is difficult to predict,” he added.
Secretary of State Antony Blinken is preparing to travel to China next week, the first visit to the country by a member of Biden’s cabinet.
The US is also stepping up efforts with allies to stem China’s push to develop cutting-edge technologies such as semiconductors used for artificial intelligence, nuclear weapons modeling and the development of hypersonic weapons.
Washington last week reached a deal with Japan and the Netherlands to block companies in those countries from exporting certain chipmaking equipment to China. The US imposed unilateral restrictions in October to prevent American companies from exporting semiconductor manufacturing tools.
Estevez hinted last year that the US is considering a number of other areas. Asked about reports that the government was considering restrictions on quantum and biotechnology, he told the CNAS think tank, “If I were a bettor, I would bet money on it.”
A formal decision on whether a total export ban on chips with US technology to China should be implemented has not yet been made.
The trade department declined to comment but said the agency, along with other government departments, will “continuously assess our policies and regulations and communicate regularly with external stakeholders.”
Huawei did not immediately respond to a request for comment.
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