The Corner

Politics & Policy

Biden’s Huawei Reprieve: Worth Hundreds of Millions of Dollars

People are seen inside a Huawei store at a shopping mall in Beijing, China, July 14, 2020. (Tingshu Wang/Reuters)

Huawei was hit hard by a Trump-era export ban, but a recent move by the Biden administration goes a long way toward assisting the embattled Chinese telecom company.

Reuters reported this week that the Commerce Department approved special licenses “worth hundreds of millions of dollars” allowing the telecom giant to purchase chips for components in its smart cars, such as screens and sensors.

Although those chips are less advanced than the ones that Huawei needs for its smartphone products, the decision to allow exemptions for the company, which is on Commerce’s “entity list” blacklist, shows a softening of U.S. policy since the Trump administration initiated a campaign warning about its involvement in Chinese espionage efforts.

As a result of Huawei’s entity-list designation, U.S. businesses were prohibited from selling any products to the company, forcing it to relinquish control of a portion of its smartphone business. In August, Huawei reported its largest-ever revenue drop.

But the Biden administration has overseen a softening of the export bans targeting Huawei, Reuters reported: “The U.S. has granted licenses authorizing suppliers to sell chips to Huawei for such vehicle components as video screens and sensors. The approvals come as Huawei pivots its business toward items that are less susceptible to U.S. trade bans.”

The Commerce Department told Retuers it can’t comment on specific license approvals, but that it continues to restrict “Huawei’s access to commodities, software, or technology for activities that could harm U.S. national security and foreign policy interests.”

This raises an important question: Does the Biden administration consider Huawei a threat to national security and a key vector of malign Chinese influence around the world? Even if Commerce hasn’t granted license for the export of components with a direct bearing on Huawei’s likely coordination with the Chinese government on espionage, the licenses do help to shore up the company’s position.

Commerce Secretary Gina Raimondo faced criticism at the time of her nomination for the post earlier this year for refusing to commit to keeping Huawei on the entity list, though she did promise to “protect Americans and our network from Chinese interference or any kind of backdoor influence into our network” during her confirmation hearing.

After Republican lawmakers raised concerns about her comments, she submitted a tougher statement about Huawei’s entity listing: “I currently have no reason to believe that entities on those lists should not be there. If confirmed, I look forward to a briefing on these entities and others of concern.”

To be sure, the Biden administration move to grant licenses for certain Huawei purchases of chips sold by U.S. companies is not the same as removing the company from the entity. The move in question here is narrow enough to grant Huawei some reprieve without triggering the massive backlash that a full delisting would entail. (Still, that hasn’t saved the administration from criticism by Republican senators Marco Rubio and Tom Cotton.)

Until the administration fully explains its decision, it will remain unclear as to what its motives are here — and whether these moves were motivated by a policy review, or merely enabled by Democratic super lobbyist Tony Podesta (who has taken Huawei as a client) and administration officials who previously lobbied or otherwise worked for Chinese tech companies.

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