US Says Policy Against Huawei Has ‘Not Eased’

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US says policy against Huawei has ‘not been eased or amended’, after criticism over approval of hundreds of millions of dollars’ worth of auto chip sales

The US said it has “not eased” policies put into place by the previous administration against Chinese technology giant Huawei.

The remarks follow criticism over the approval of hundreds of millions of dollars’ worth of auto chip sales to the company.

The US placed Huawei on the “entity list” national security blacklist in 2019, accusing it of acting against US interests.

The blacklist requires American companies to request approval for technology sales to Huawei, under the assumption that most will be denied.

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Blacklist

The US Commerce Department says it’s prohibited from disclosing licence approvals or denials.

But in August of last year it said licenses for cutting-edge technologies such as 5G would be denied, while sales of less-sophisticated products would be decided on a case-by-case basis.

The blacklist puts US technology suppliers in a difficult position, as it limits their access to the increasingly important Chinese market.

The Commerce Department said in a statement that the rules are intended to allow US companies to receive revenues from Huawei for lower-value technology, while restricting “Huawei’s access to commodities, software, or technology for activities that could harm US national security and foreign policy interests”.

Under those rules, in recent weeks and months the Commerce Department has granted suppliers permission to sell chips to Huawei for vehicle components such as video screens and sensors, Reuters reported last week, citing unnamed sources.

Auto chips

After the suppliers received licenses authorising the sale of tens of millions of dollars of chips to Huawei, the company reportedly requested that they apply again and request higher values such as one or two billion dollars. The licenses are generally valid for four years.

Critics said the US administration was being too soft on Huawei, with Republican Senator Tom Cotton calling the approvals “unacceptable”.

Senator Marco Rubio said the move was “yet another example of President Biden’s failure to protect America’s economic and national security”.

The Commerce Department said the previous policy against Huawei “has not been eased or amended”.

“The Biden Administration has not changed the regulatory restrictions on Huawei and its affiliates on the Entity List imposed in 2019 or 2020 or the policy for implementing those restrictions developed during the Trump administration,”the department stated.

Business shift

The approvals come as Huawei is shifting its business toward areas that are less susceptible to US trade restrictions, after selling off a large chunk of its once-dominant smartphone handset business, which had been crippled by the blacklist and other actions.

The selloff of Huawei’s Honor smartphoone brand led to the company’s biggest-ever revenue drop in the first half of 2021.

At the Shanghai Auto Show earlier this year rotating chairman Eric Xu announced deals with three state-owned Chinese automakers, including BAIC Group, to supply them with a smart vehicle operating system called Huawei Inside.

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