The US government is taking its sanctions against Huawei more seriously. There should be no more exceptions to the export ban.
The United States is stepping up its efforts to make state-affiliated companies in the People’s Republic of China more difficult to access the latest technology. The list of companies on the export ban list is getting longer, especially since some Chinese companies have circumvented the resale bans. US President Joe Biden has secured the support of Japan and the Netherlands for the export ban for particularly advanced chip manufacturing technology, which will also ban such exports to China. And now the US government is no longer issuing exemptions for the sale of technology to Huawei.
Under Donald Trump as US President, the US issued new export bans, including for technology sales to Huawei and the Chinese chip manufacturer SMIC. However, at the same time, the US government granted extensive exemptions. For example, in the five and a half months from November 9, 2020, to April 20, 2021, 113 export licenses related to Huawei were issued for a total value of $61 billion, along with 188 export licenses to SMIC for a total value of $42 billion. For comparison: Huawei made almost 100 billion dollars in sales in 2021, compared to just under 92 billion dollars last year.
The exemptions regarding Huawei did not apply to 5G technology but did apply to 4G, WLAN and others. The Department of Commerce has now informed several US companies that it will not issue any further exemptions for Huawei. The Financial Times reports, citing insiders. Biden is thus fulfilling a demand made by Republicans. However, the change of course also takes place against the background that Huawei has significantly expanded its business areas in recent years.
Netherlands and Japan follow on chips
US services have concluded that Huawei is helping the People’s Republic of China to spy on it. Under President Biden, the Commerce Department has begun a review of its own regulations. The aim is to make it more difficult for the People’s Liberation Army to develop weapons with US technology. It is specifically about chips that are particularly suitable for nuclear weapon simulations, hypersonic weapons, and artificial intelligence.
To this end, the USA reached an agreement with the governments of the Netherlands and Japan last week. These two states have pledged to ban the export of certain computer chip manufacturing equipment, including advanced lithography machines. In Japan, this applies particularly to Tokyo Electron and Nikon, and in the Netherlands to ASLM. This company has told the Financial Times that it does not expect any impact this year because implementation will take time. The ban has been in effect for US companies since last year.