The Biden administration has recently taken action by revoking eight licenses that allowed certain companies to ship goods to Chinese telecoms equipment giant, Huawei. This move was first reported in a document by Reuters as part of the government’s efforts to put pressure on the resurgent company. These licenses were granted by the Commerce Department, which is responsible for overseeing U.S. export policies. In a response to an inquiry by Republican Congressman Michael McCaul, the Commerce Department confirmed that since the beginning of 2024, eight additional licenses involving Huawei have been revoked.
The document revealed that among the licenses revoked were those issued to companies like Qualcomm and Intel. These licenses covered a range of goods including exercise equipment, office furniture, and low-technology components for consumer mass-market items like touchpad and touchscreen sensors for tablets. Although these items are widely available in China from Chinese and foreign sources, the Commerce Department decided to take action by revoking the licenses to Huawei. When approached for comments, both Huawei and Qualcomm remained silent while Intel declined to provide a statement on the matter.
As Huawei continues to make a comeback despite efforts by the U.S. government to restrict its operations on national security grounds, the Biden administration is stepping up its measures to thwart the company’s progress. The renewed focus on Huawei comes after the company posted a significant increase in sales following the introduction of a new smartphone powered by a chip from Chinese chipmaker SMIC. This move raised concerns among China hardliners in Congress, prompting a push to tighten restrictions on Huawei.
The restrictions placed on Huawei in 2019 due to security concerns have had a significant impact on the company’s operations. Suppliers to Huawei have had to navigate through a complex process of obtaining special licenses before shipping goods to the company. Despite these challenges, Huawei suppliers have managed to secure licenses amounting to billions of dollars to continue selling goods and technology to the company. This was made possible by a policy introduced during the Trump administration that allowed a broader range of items to be exported to Huawei compared to other companies on the entity list.
According to the document, from 2018 to 2023, the Commerce Department approved $335 billion worth of licenses out of a total of $880 billion applications seeking permission to sell to Chinese entities on the entity list. The majority of these approvals, amounting to $222 billion, came in 2021, which was Biden’s first year in office. Despite the challenges posed by the trade restrictions, Huawei’s smart car component business has contributed to the company’s resurgence, with its fastest revenue growth recorded in four years in 2023.
The Biden administration’s decision to revoke licenses to Huawei reflects a broader effort to curb the company’s resurgence and address national security concerns. While these measures may pose challenges to Huawei’s operations, the company continues to find ways to innovate and grow its business in the face of adversity.
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