Tue, Jul 16, 2019 - Page 10 News List

US Huawei sales might resume soon

Reuters, WASHINGTON

The US might approve licenses for companies to restart new sales to Huawei Technologies Co (華為) in as little as two weeks, a senior US official said, in a sign that US President Donald Trump’s recent effort to ease restrictions on the Chinese company could move forward quickly.

Huawei, the world’s largest telecommunications equipment maker, was added to a US Department of Commerce list in May that prohibits US companies from supplying it with new US-made goods and services unless they obtain licenses that would likely be denied.

Yet late last month, after meeting with Chinese President Xi Jinping (習近平), Trump announced that US firms could sell products to Huawei, and on Tuesday last week, US Secretary of Commerce Wilbur Ross said licenses would be issued where there is no threat to national security.

Trump’s reversal, and rapid implementation by the department, suggests chip industry lobbying, coupled with Chinese political pressure, could well reignite US technology sales to the Chinese firm.

Two US chipmakers that supply Huawei told reporters that they would apply for more licenses after Ross’ comments.

The chipmakers asked to remain anonymous.

A customer response management company and a firm that simulates cross-sectional radar for Huawei are also likely to file applications in the next few days, said Craig Ridgley, a trade compliance consultant in Washington.

Out of US$70 billion that Huawei spent buying components last year, about US$11 billion went to US firms, including Qualcomm Inc, Intel Corp and Micron Technology Inc.

“Since there’s no downside, companies are absolutely submitting applications, as required by the regulations,” said Washington lawyer Kevin Wolf, a former US assistant secretary of commerce for export administration.

“The entity list restrictions should be removed altogether, rather than have temporary licenses applied for US vendors,” a Huawei spokesman said.

“Huawei has been found guilty of no relevant wrongdoing and represents no cybersecurity risk to any country so the restrictions are unmerited,” he said.

US companies can currently sell goods to maintain existing networks and provide software updates to existing Huawei handsets, but are prohibited from making new sales of US-made goods and services.

Furthermore, not all US sales to Huawei hinge on government approvals of license requests.

Some US chipmakers’ sales to Huawei might not need licenses because their products could be beyond the scope of US export controls, as many are manufactured abroad with few US components.

US officials have sought to clarify the new policy in the past few weeks, saying that they would allow sales of non-sensitive technology readily available abroad if national security is protected, but they have also reiterated that Huawei remains on the entity list, and relief would be temporary.

Still, it is unclear which products are to be granted licenses.

Some US suppliers sought clarity at a conference the department held in Washington last week.

On Thursday, one manufacturer’s representative was told by the senior US official that licenses could be granted in two to four weeks.

The person, who did not want to be identified, said the official did not delineate the criteria for license approvals, but she came away believing they would be made on a case-by-case basis, at least at first, as the agency seeks to form more broad opinions.

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