On Wednesday, the Trump administration gave a second reprieve to Huawei this week when they allowed some suppliers to restart sales to the Chinese company after it was placed on a trading black list six months ago due to security concerns. According to the Commerce Department, they have started issuing licenses to some companies for selling goods to Huawei. This undoubtedly expands the supplier base of the telecoms giant and provides much-awaited clarity to the industry that once sold it goods worth billions of dollars. It wasn’t made clear immediately as to what products had been approved for sale to the top telecommunication equipment maker in the world.
Also the second largest smartphone maker, Huawei Technologies Co. has been waiting anxiously for the license from Google for supplying its mobile services to the company’s new models. No comment was made by Google in this regard. Nearly 300 license requests had been submitted as per the information provided by a U.S. official and half of them have been processed. From this half, almost a quarter received approval whereas the other quarter was denied. A different person, who is also familiar with the process, said that some of the license for sales that were approved included non-electronic device components and cell phone components.
In a statement, the Commerce department said that these narrow licenses were being issued for authorizing specific and limited activities that don’t pose a significant risk to the foreign policy and national security interests of the United States. As per two industry sources, companies had been getting ‘intent to deny’ notices and notices of approval on Wednesday from the Commerce Department. This is in light of U.S. President Donald Trump trying to strike a partial trade deal with Chinese President Xi Jinping. Wilbur Ross, the U.S. Commerce secretary, said late on Tuesday that they had received approximately 290 requests for specific licenses.
He disclosed that they were now sending some approvals and the 20-day ‘intent-to-deny’ letters. This move came after the temporary general license of the Chinese firm was renewed by the Commerce Department on Monday. This extended Huawei’s permission to conduct limited transactions for assisting the rural network operators in the United States. A tit-for-tat trade war with China has been ongoing, which has hit global growth and roiled markets. Therefore, the Trump administration is looking to put an end to it by signing a phase one trade deal.
According to security experts, the White House is not willing to pull the plug on Huawei because that would also create problems for US companies, but they haven’t ruled it out completely. The announcement by the Commerce Department was welcomed by The Semiconductor Industry Association. The trade group said that sales of non-sensitive products would help U.S. chipmakers in staying competitive. They added that they were looking forward to additional license approvals. There are pending cases against Huawei filed by the US for allegedly violating Iran sanctions and stealing American intellectual property. The company had been placed on a trade blacklist in May.
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