Hobbit Business Review

Biden Administration May Cut Off Huawei From U.S. Suppliers. Here’s The Backstory

The Biden Administration is in serious talks to cut off Chinese telecommunications company Huawei from its U.S. suppliers, according to reporting from The Wall Street Journal, as a broader means to crack down on the Chinese technology sector.

KEY FACTS

Huawei, a Chinese telecommunications company, relies on U.S. suppliers such as Intel Corp. and Qualcomm Inc. for processors used in the company’s laptops and smartphones.

U.S. sales to Huawei have been limited for years, and in 2019 the Trump administration put the company on its “Entity List,” which designates certain foreign persons and firms subject to specific license requirements for any sort of trade.

In 2020, Huawei was officially deemed a national security threat by the Federal Communications Commission (FCC) for its close ties to the Chinese government and its potential role assisting in espionage activities.

Later in 2020, both Intel Corp. and Qualcomm Inc. were given special licenses to continue supplying Huawei some of their products, which include less advanced processors and chips—though U.S. officials have signaled to both companies they should begin to wind down their sales to the Chinese company, according to a report from The Wall Street Journal.

In November, the U.S. also banned the sales and imports of new telecommunications equipment from Huawei and ZTE, a telecom company partially owned by the Chinese state, due to national security concerns.

President Biden had previously restricted the export of semiconductors to China back in October in hopes of curtailing Beijing’s technological and military advances.

KEY BACKGROUND

The Biden Administration has been clamping down on American tech exports to Chinese entities, such as last month, when Biden restricted the sale of semiconductors to 36 Chinese companies. Just last week , the U.S. was able to get Japan and the Netherlands to agree to join in on its efforts to bar shipments of their hi-tech machinery to China. The U.S.-China relationship soured well before Biden took office. During the Trump Administration, the U.S. imposed tariffs of more than $360 billion dollars worth of Chinese goods, prompting China to retaliate with tariffs on $110 billion dollars worth of American goods. Also under the the Trump presidency, the Department of Treasury labeled China a currency manipulator in 2019.

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