Trump may pull licences for Huawei suppliers in one last dig at company

18 Jan 2021297 Views

Image: © Oleksandr/Stock.adobe.com

Joe Biden will be inheriting a tense relationship between the US and China that has been festering for the last four years.

In the final days of his presidency, Donald Trump has reportedly made one last swipe at Huawei by pulling licences for suppliers of the company.

Reuters reported on Sunday (17 January) that the Trump administration is revoking licences that allowed some American companies, including Intel, to continue selling to the Chinese telecoms equipment vendor. Other pending applications for licences are at risk of being rejected, according to Reuters sources.

This would be a final swing at Huawei from Trump, who has been butting heads with the Chinese company over the last four years.

The US has repeatedly deemed Huawei to be a national security threat, claiming it has close links to the Chinese government and accusing it of being involved in espionage on China’s behalf by spying through its 5G infrastructure. Huawei has fiercely denied the claims for years.

In 2019, strict curbs were placed on Huawei and its ability to trade with US firms, but a small number of US companies could continue to do business with Huawei with a specific licence.

According to Reuters, the Semiconductor Industry Association trade group has been informed that a “significant number” of licence applications would be denied, as well as the “revocation of at least one previously issued licence”. There are roughly 150 applications pending approval, the news agency reported. Any companies that are rejected will have a window to appeal the decision.

China tensions

Trump and his administration have viewed Chinese tech companies with a great deal of suspicion, which has contributed to tense trade relations with Beijing.

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The influence of tension with Huawei can be seen in other countries that have followed suit with bans of their own – most notably the UK, which has ordered telecom operators to strip out Huawei 5G gear by 2027. Restrictions have also been seen in Sweden.

Another high profile quarrel is with TikTok. Last year, the US – once again citing national security concerns – ordered Chinese owner ByteDance to divest itself from the wildly popular social media app or else face a ban in the US.

Months of deal-making and wrangling saw Oracle and Walmart emerge as suitors to buy TikTok in the US but no deal has crossed the line yet and the whole fiasco remains in limbo.

In a twist in the Trump-TikTok saga, the social media company restricted accounts related to the US president after the Capitol attack earlier this month, much like other tech companies, meaning TikTok banned Trump first.

Once Joe Biden is inaugurated on Wednesday (20 January), he will inherit the strained relationship and trade war between the US and China. Maintaining a tough line on China is one of the few issues that Democrats and Republicans agree on, but with different approaches.

The Biden administration is expected to take a more tactful approach to China and its companies, rather than the bullhorn style of the last four years. A recent survey of Chinese business leaders found that they are more hopeful of better relations during this new presidency.

However, tensions cannot be easily undone as evidenced by the recent flip flop by the New York Stock Exchange over its plans to de-list, backtrack and de-list again three Chinese telecom companies after drawing scrutiny from authorities in both countries.

Jonathan Keane is a freelance business and technology journalist based in Dublin

editorial@siliconrepublic.com