Biden’s administration is adding new limits to Huawei’s suppliers

(Reuters) – Biden’s administration this week changed the licenses for companies to sell to China’s Huawei Technologies Co Ltd, further restricting companies from providing items that can be used with 5G devices, sources said.

The changes could disrupt existing contracts with Huawei negotiated under previous licenses that have now changed, two of the sources said.

The actions show that the Biden government is increasing exports to Huawei, the telecommunications equipment manufacturer blacklisted for concerns about US national security.

A spokeswoman for the US Department of Commerce declined to comment, saying the licensing information is subject to confidentiality. A Huawei spokeswoman declined to comment.

The first export licenses were issued by the Ministry of Commerce after the company was blacklisted by the department in 2019. This week’s new terms ensure that older permits better align with the tougher licensing policies implemented in the closing days of the Trump administration.

In January, the Trump administration decided it would deny 116 licenses with denominations totaling $ 119 billion, and approve only four of $ 20 million, according to a trade department document reviewed by Reuters. Most of those denied fell into three broad categories: memory, handset and other devices, and network applications.

Between 2019 and 2020, the administration approved licenses for companies to sell $ 87 billion worth of goods and technology to Huawei, the document said. Licenses are generally valid for 4 years.

While new restrictions on those licenses harm some suppliers, one source noted, they also ensure a level playing field between companies, as some were licensed under less restrictive policies.

According to a revised license from Reuters, which went into effect on March 9, items may not be used “ with or in 5G devices, ” a broad interpretation that prohibits the item from going into a 5G device, even if it has nothing to do has with 5G. Operate.

Another modified license was not authorized for use in military, 5G, critical infrastructure, enterprise data centers, cloud or space applications as of March 8.

The announcement also says that certain items must have a density of 6 gigabytes or less, and other technical requirements.

Both revised licenses say Huawei or customers must implement a parts control plan prior to export and make inventory data available to the US government upon request.

Companies are placed on the trade blacklist, also referred to as the “entity list”, due to concerns about national security and foreign policy, and licenses to sell to them are generally denied.

But Trump took an inconsistent approach to Huawei, opening the door to more sales as he sought a trade deal, but then got harder as tensions began to build over the coronavirus and Beijing crackdown in Hong Kong last year.

According to the January document seen by Reuters, there were still about 300 filings with a reported value of $ 296 billion pending. It is not clear how many of these have been decided.