(Reuters) – The Biden administration this week changed licenses for companies to sell to China’s Huawei Technologies Co Ltd, further restricting companies from providing items that can be used with 5G devices, the sources said.
The changes could disrupt existing contracts with Huawei that were agreed under previous licenses that have now been changed, two of the sources said.
The actions show that the Biden government is reinforcing a hard line in exports to Huawei, a manufacturer of telecommunications equipment included in the blacklist of trade for national security issues in the United States.
A spokeswoman for the U.S. Department of Commerce declined to comment, saying the licensing information is subject to confidentiality. A spokeswoman for Huawei declined to comment.
The initial export licenses were granted by the Department of Commerce after the company was blacklisted by the department in 2019. New conditions this week make older licenses more consistent with the tougher licensing policies implemented in the past few days. Trump administration.
In January, the Trump administration decided it would deny 116 licenses with a nominal value of $ 119 billion and approve only four licenses worth $ 20 million, according to a Commerce Department document reviewed by Reuters. Most denies fall into three broad categories: memory, phone and other network devices and applications.
Between 2019 and 2020, the government approved licenses for companies to sell $ 87 billion in goods and technology to Huawei, the document said. Licenses are generally valid for 4 years.
While the new restrictions on these licenses hurt some suppliers, a source noted, they also level the playing field between companies, as some have received licenses under less restrictive policies.
According to a revised license seen by Reuters, which went into effect on March 9, the items cannot be used “with or on any 5G devices”, a broad interpretation that prohibits the item from entering a 5G device, even if it has nothing to do with 5G working.
Another amended license has not been authorized for use in the military, 5G, critical infrastructure, corporate data centers, cloud or space applications, as of March 8.
The notice also says that certain items must have a density of 6 gigabytes or less, in addition to other technical requirements.
Both revised licenses say that prior to export, Huawei or customers must implement a parts control plan and make inventory records available to the United States government upon request.
Companies are put on the commercial blacklist, known as the “entity list,” for reasons of national security and foreign policy, and licenses to sell to them often face a likely pattern of denial.
But Trump took an inconsistent approach to Huawei, opening the door to more sales when he sought a trade deal, but then eased further as tensions began to rise due to the coronavirus and Beijing’s crackdown in Hong Kong this year. past.
According to the January document seen by Reuters, some 300 orders with declared amounts of $ 296 billion were still pending. It is not clear how many of them have been decided.
Reporting by Karen Freifeld in New York; Edited by Chris Sanders, Matthew Lewis and Lincoln Feast.