Huawei export licenses may be revoked by the US

The new action would go a step further by revoking existing permits. It comes amid heightened tensions between the US and China sparked by a suspected Chinese spy balloon traversing the US and intelligence suggesting Beijing is considering deadly aid to Russia for its war in Ukraine.

“The policies that would have allowed exports to Huawei, despite the list of entities, are being phased out,” said a former senior security official familiar with the government’s policy deliberations. “The White House is now telling Commerce, ‘Stop 4G sales, it’s time to hurt Huawei more, to try and end their demise,’” the former official said.

Huawei was placed on the so-called Entity List of the Ministry of Commerce in 2019 by the agency that oversees export controls, the Bureau of Industry and Security. The BIS cited potential threats to national security when issuing its criminal list, which requires exporters to obtain special licenses to approve the sale of US technology to the company. US officials say they are concerned that the Chinese government could use Huawei’s telecommunications technology for espionage.

Intel declined to comment. Huawei and Qualcomm did not respond to requests for comment. Huawei has said its products pose no risk to national security.

Alan Estevez, the Commerce Department’s undersecretary for industry and security, told lawmakers on Tuesday that the licensing rules created under the Trump administration, which allow technology under 5G to be sold to Huawei, are among the policies under review. He said the Biden administration is also considering additional export controls.

“All those things are under review,” Mr. Estevez told the House Foreign Affairs Committee. “We are doing everything we can to prevent sensitive US technologies from falling into the hands of malicious actors,” he said, including China’s military, intelligence and security services.

In his prepared testimony, Mr. Estevez said his office approved about 70% of export control permit applications related to China last year.

A revocation of existing licenses could have a significant impact on US chip makers, many of which have been allowed to continue selling older-generation Huawei phone chips and other processors widely available worldwide. Chip companies have argued that restrictions on such products harm US industry because they deprive them of revenue to fund domestic research and development.

Between November 2020 and April 2021, the BIS approved Huawei licenses worth $61.4 billion, according to data released by Rep. Michael McCaul (R., Texas) in 2021, suggesting that many billions of dollars in revenue could be at risk if existing licenses are cancelled. Export licenses typically span several years and prescribe a value of products a company is allowed to ship under these licenses.

Still, some security analysts say older-generation chips are still used militarily, including in precision-guided bombs. The flow of semiconductors through China to Russia despite US export controls prohibiting the supply of such goods to Russia has exposed the problem.

Chinese officials have repeatedly criticized the sanctions, saying Beijing is not providing material support to Russia for its war in Ukraine.

Amid simmering tensions between the US and China, policymakers in the administration and on Capitol Hill are trying to close what they believe are holes in US trade policy that risk supplying Western technology to enemies such as Iran and Russia and strategic competitors such as China.

Some industry officials say the government may be considering Huawei’s supply ban as leverage for broader negotiations with China, including trade and national security.

But, said Clay Lowery, a former senior national security official who now works at the Institute of International Finance, a consortium of the world’s largest financial institutions, “It will be difficult to influence China to decline its economic support for Russia. build.”

“That said, Chinese companies have been cautious about their relations with Russia as they also want to maintain their relations with the United States and its Western allies,” added Mr Lowery, who will testify Tuesday before a Senate Judiciary Committee hearing. banking. about export controls.

The Trump administration had also considered revoking existing licenses when it moved in 2019 to put Huawei on its entity list, the former official said. It ruled out action due to concerns from the Treasury Department about the possible fallout, the person said, including possible retaliation from Beijing and the loss of revenue that chip makers need to fund research and development.

—Dan Strumpf contributed to this article.

Write to Ian Talley at Ian.Talley@wsj.com and Asa Fitch at asa.fitch@wsj.com