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Biden administration adds new restrictions on Huawei suppliers


Reuters reported that the Biden administration this week amended licenses for companies to sell to China's Huawei, imposing further restrictions on companies on the supply of items that could be used with 5G devices.

The changes may disrupt current contracts with Huawei that have been agreed upon under previous licenses that have now been changed.

The actions show that the Biden administration is strengthening its tough stance on exports to Huawei, the blacklisted telecommunications equipment maker for trade because of concerns about U.S. national security.

The Ministry of Commerce granted the initial export licenses after the company was blacklisted in 2019.

This week's new conditions make old licenses more consistent with stricter licensing policies implemented in the trump administration's final days.

In January, the Trump administration decided to reject 116 licenses with a total nominal value of $119 billion, and to approve four licenses worth only $20 million, according to the Commerce Department document.

Most of those who have been rejected are divided into three main categories: memory, phone, and other devices, and network applications.

Between 2019 and 2020, the administration approved licenses for companies to sell $87 billion worth of goods and technology to Huawei.

While the new restrictions on such licenses are harmful to some suppliers, they also work for equal opportunities between companies, some of which have been licensed under less restrictive policies.

According to one of the revised licenses, which came into effect on March 9, the items may not be used with or in any 5G devices, a broad interpretation that prohibits the item from accessing a 5G device even if it has nothing to do with the 5G function.

As of March 8, no license has been authorized to use the last modified military, 5G, critical infrastructure, enterprise data centers, cloud, or space applications.

The notice also states that some items must be at a density of 6GB or less, and other technical requirements.

Both revised licenses, before exporting, say: Huawei or customers must implement the parts control plan and make inventory records available to the U.S. government upon request.

Companies are blacklisted for trade, known as the entity list, because of national security and foreign policy concerns, and sales licenses generally face a criterion of potential rejection.

But Trump had an inconsistent approach to Huawei, opening the door to more sales as he sought a trade deal, but then began to fall further as tensions over the Coronavirus and the Beijing campaign in Hong Kong increased.

According to the January document, about 300 applications worth $296 billion remain pending.