WASHINGTON — The Biden administration is considering entirely cutting off Chinese telecommunications giant Huawei Technologies Co. from U.S. suppliers over national-security concerns by tightening export controls targeting the firm, according to people familiar with the matter.
The move — should the administration move forward — would mark the latest salvo in the high-stakes clash between the world’s two largest economies as U.S. policy makers seek to counter China’s industrial policy they say threatens Western interests.
The Trump administration in 2019 added Huawei to the Department of Commerce’s “Entity List,” a roster of foreign companies deemed to be national-security threats. However, the Commerce Department later agreed to grant licenses to U.S. companies allowing them to sell technology to Huawei as long as it wouldn’t put national security at risk.
The Biden administration is now considering no longer granting such licenses, although no decision has been made, the people familiar said. The deliberations were previously reported by Bloomberg and the Financial Times.
The U.S. items exempted from the Huawei blacklist include less advanced chips used in the company’s lineup of smartphones and personal computers. Huawei has been unable to offer a 5G-enabled smartphone because U.S. restrictions cut it off from the most advanced chips needed to power such devices.
An expanded version of this report appears on WSJ.com.
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The United States is reportedly planning to stop China-based telecoms giant Huawei from purchasing any components from U.S. suppliers. This news comes from The Wall Street Journal, which recently reported on the matter.
The move could be seen as the latest escalation in the escalating trade war between the United States and China and has the potential to cause significant disruptions to the global tech industry and supply chains.
It is not clear what motivated this decision by the United States, but it could be the result of the increasingly strained relationship between the two countries, or part of the U.S. government’s efforts to restrict Huawei’s operations within the U.S.
Huawei is one of the world’s largest suppliers of telecoms equipment and supplies a range of products and services to telecoms networks around the world. It is estimated that the company provides 5G technology to more than 30 countries.
This new restriction would prohibit Huawei from purchasing any components from U.S.-based suppliers, even if those components are supplied through a third-party country.
The move is likely to be contested by Chinese authorities and could lead to further retaliation from Beijing.
This new measure by the U.S. could have lasting economic impacts in the tech industry, with analysts expecting the cost of components to rise and the ability of Huawei to continue operations to be severely compromised.
The decision has yet to be formally made but could be announced in the coming days. For now, it remains to be seen what the resulting consequences on the tech industry will be.