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Biden administration adds new restrictions on Huawei suppliers

 Biden administration adds new restrictions on Huawei suppliers

Reuters indicated that the Biden administration this week amended licenses for companies to sell to the Chinese company Huawei, which imposed further restrictions on companies on the supply of items that can be used with 5G devices.

Biden administration adds new restrictions on Huawei suppliers

The changes could disrupt existing contracts with Huawei that were agreed upon under previous licenses that have now changed.

The measures show the Biden administration is strengthening its hawkish stance on exports to Huawei, a telecom equipment maker who is blacklisted for trade due to US national security concerns.

The Ministry of Commerce granted initial export licenses after the company was included in the ministry's commercial blacklist in 2019.

This week's new terms are making old licenses more consistent with the stricter licensing policies implemented in the final days of the Trump administration.

In January, the Trump administration decided to reject 116 licenses totaling $ 119 billion in nominal values, and approve four licenses worth only $ 20 million, according to the Commerce Department document.

Most of those rejected fall into three main categories: memory, phone and other devices, and network applications.

Between 2019 and 2020, the administration approved licenses for companies to sell $ 87 billion in goods and technology to Huawei.

While the new restrictions on these licenses harm some suppliers, they also level the playing field for companies, with some obtaining licenses under less restrictive policies.

According to one of the revised licenses, which went into effect on March 9, the items may not be used with or in any 5G devices, a broad interpretation that prohibits the item from accessing a 5G device even if it has nothing to do with 5G functionality.

As of March 8, no other modified license has been authorized for use in the military, 5G, critical infrastructure, enterprise data centers, or cloud or satellite applications.

The notice also states that some items must be of 6 GB density or less, and other technical requirements.

Before exporting, both revised licenses say: Huawei or customers must implement the parts control plan and make inventory records available to the US government upon request.

Companies are being placed on the trade blacklist, known as the Entity List, due to national security and foreign policy concerns, and sales licenses generally face a standard of potential denial.

But Trump had an inconsistent approach to Huawei, which opened the door to more sales as he sought a trade deal, but then began to decline further as tensions over the coronavirus and Beijing's campaign in Hong Kong increased.

According to the January document, there were still about 300 orders worth $ 296 billion pending.