According to three persons with knowledge of the situation, the Biden administration has ceased accepting permits for American businesses to sell the majority of their goods to China’s Huawei.
For several years, Huawei has been subject to U.S. export prohibitions on products related to 5G and other technology, although representatives from the U.S. Department of Commerce have given some American companies permits to sell Huawei specific products and services. In 2020, Huawei will be able to purchase 4G smartphone chips from Qualcomm Inc.
A Commerce Department spokesperson said officials “continually assess our policies and regulations” but do not comment on talks with specific companies. Huawei and Qualcomm declined to comment. Bloomberg and the Financial Times earlier reported the move.
Chinese foreign ministry spokesperson Mao Ning said that China opposes the United States abusing an overly broad notion of national security to suppress Chinese firms unreasonably.
The move “goes against the principles of the market economy and rules of international trade and finance, hurts the confidence the international community has in the U.S business environment and is blatant technological hegemony,” Mao said during a press conference in Beijing on Tuesday.
One person familiar with the matter said U.S. officials are creating a new formal policy of denial for shipping items to Huawei that would include items below the 5G level, including 4G items, Wifi 6 and 7, artificial intelligence, and high-performance computing and cloud items.
Another person said the move was expected to reflect the Biden administration’s tightening of policy on Huawei over the past year. Licenses for 4G chips that could not be used for 5g, which might have been approved earlier, were being denied, the person said. Toward the end of the Trump administration and early in the Biden administration, officials had still granted licenses for items specific to 4G applications.
When Huawei was added to a trade blacklist by American officials in 2019, the majority of American suppliers were prohibited from sending products and technology to the corporation unless they had permits. Officials kept tightening the restrictions to prevent Huawei from purchasing or designing the semiconductor chips that power the majority of its products.
However, American regulators issued Huawei with permissions that permitted it to purchase some goods. For instance, Huawei’s suppliers received licenses worth $61 billion to sell to the multinational manufacturer of telecom equipment from April through November 2021.
Huawei reported its overall revenue in December to be roughly $91.53 billion, a modest decrease from 2021 when U.S. sanctions drove its sales to drop by about a third.