US Government Stops Export Licenses to Huawei

The United States government plans to stop granting export licenses to companies dealing with China-based Huawei and its subsidiaries. This will essentially leave the telecommunication giant without American technologies, reports the Financial Times. 

The U.S. Department of Commerce added Huawei and virtually all of its subsidiaries to the entity list in 2019 – 2020, to curtail its ability to build new products featuring U.S. Technologies, and started to require companies exporting such technologies to Huawei to obtain an export license. But those licenses were actually granted, which is how Huawei and its affiliates got products involving technologies originating in the U.S. 

Huawei and its subsidiaries could not get the truly advanced technologies required for things like 5G networks. But the company could get chips required for various consumer electronics (including smartphones and PCs), plus telecommunication equipment, which kept the company afloat. 

But this is going to change soon, as the U.S. Department of Commerce's Bureau of Industry and Security (BIS) recently notified those companies that it would no longer grant licenses to export American technology to Huawei, according to Financial Times. Alan Estevez, the head of the BIS, is currently reviewing China-related export granting policies in a bid to figure out the next steps that the U.S. Has to take. 

Back in October, the U.S. Imposed sweeping sanctions against China's semiconductor and supercomputer sectors, in a bid to curtail the development of China's military capabilities, but this will also restrict the country's technological and economical advances. Imposing additional curbs against Huawei will certainly impact the Chinese economy more than it would impact the country's military capabilities, such as nuclear weapons or hypersonic missiles.  

Other recent actions of the U.S. Government include imposing more restrictions on exports of wafer fab equipment (WFE) to China. To ensure that companies like SMIC do not have access to advanced fab tools, the U.S. Reached a pact with Japan and the Netherlands to put curbs on exports by companies like ASML, Canon, Nikon, and Tokyo Electron. Some believe this will speed up the development of China's own wafer fabrication tech, but it will be particularly hard to do that without tech developed in the USA.