US ‘Stops Providing’ Huawei Export Licences

The US government has stopped providing US firms with licences to export technology to Chinese tech company Huawei, according to multiple reports.

The US Commerce Department has notified some companies that it will no longer grant licences to any firm exporting US technology to Huawei, the Financial Times reported, citing unnamed people familiar with discussions inside the Biden administration.

The move comes as the Republican-led House of Representatives prepares a review of the US Commerce Department’s activities.

An industry watcher told the FT the administration was partly ramping up its efforts against the Chinese tech sector following last November’s elections, in which the Republican Party took control of the House.

Security threat

Huawei, once the world’s biggest telecoms equipment maker, was one of the major initial targets in US efforts to hobble Chinese tech firms.

The company’s lead in technologies such as 5G equipment and smartphones was flagged as a national security concern in the US. Huawei has denied posing a security threat.

The Trump administration in 2019 placed the company on a blacklist known as the Entity List, banning US firms from supplying it with goods or services without a licence.

But some licences were granted to companies such as Qualcomm and Intel for technologies not related to 5G.

Consequences

The blacklist led to a steep revenue decline for Huawei in 2021, but the company said in December that its 2022 revenues were flat at 636.9 billion yuan ($94bn, £76bn).

The company has shifted its focus, spinning off its Honor smartphone brand and diversifying into areas such as cloud computing and undersea cables.

But a total ban on acquiring US technology could have dire consequences for the firm.

“We continually assess our policies and regulations and communicate regularly with external stakeholders,” the Commerce Department said in a statement. Huawei did not immediately respond to a request for comment.

Tech sanctions

The US has more recently expanded its efforts against Chinese tech firms into other areas, in October announcing a ban on exporting advanced chipmaking equipment from US manufacturers to China and in December adding China’s biggest manufacturer of memory chips, YMTC, to the Entity List.

Last week the US reached an agreement with the Netherlands and Japan that is expected to see similar restrictions applied to providers of chipmaking equipment in those countries, such as ASML and Tokyo Electron.