The Biden administration has recently taken actions to revoke eight licenses that allowed companies to ship goods to Chinese tech giant Huawei. This move is part of an effort to put pressure on Huawei as it continues to regain foothold in the market despite previous restrictions. The Commerce Department, responsible for overseeing U.S. export policy, has been actively involved in this process.
Companies like Qualcomm and Intel, whose licenses were revoked, are now facing challenges in supplying goods to Huawei. The revocation has impacted a wide range of items, including exercise equipment, office furniture, and low-technology components like touch sensors. This decision by the Biden administration highlights the government’s efforts to curb Huawei’s growth and prevent it from becoming a security risk.
The revocation of licenses comes amidst growing pressure from Republican China hardliners in Congress to crack down on Huawei. Despite facing export restrictions, Huawei managed to boost its smartphone sales significantly in the first six weeks of 2024. The company’s smart car component business has also seen rapid growth, leading to its resurgence in the market.
Huawei was added to the U.S. trade restriction list in 2019 due to concerns about potential spying activities. This move required suppliers to obtain special licenses before shipping goods to Huawei. However, during the Trump administration, a policy was introduced that allowed a broader range of items to be sold to the company, resulting in billions of dollars’ worth of licenses being approved.
The Commerce Department approved $335 billion worth of licenses from 2018 to 2023 out of a total of $880 billion applications seeking permission to sell to Chinese parties on the entity list. In 2021, Biden’s first year in office, $222 billion worth of approvals were granted out of $560 billion in applications received that year. This shows the significant impact of U.S. export policies on companies like Huawei and its suppliers.
The Biden administration’s decision to revoke licenses for Huawei suppliers is a strategic move to control the company’s growth and prevent potential security risks. It also reflects the ongoing tensions between the U.S. government and Chinese tech companies. As Huawei continues to expand its reach, it remains to be seen how future regulatory actions will shape the company’s trajectory in the global market.
Leave a Reply