US companies will be allowed to sell some products to Huawei

10 Jul 2019117 Views

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The announcement was made in Washington, DC. Image: © kropic/Stock.adobe.com

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The US government has confirmed that it will issue licences to companies that want to sell goods to Chinese telecom Huawei, yet industry observers still have questions.

The US government will issue licences to companies that want to sell goods to Huawei where there is no threat to national security, commerce secretary Wilbur Ross has announced.

Speaking at a conference in Washington, DC, Ross confirmed that Huawei would remain on the Entity List to which it was added in May. Winning licences would require overcoming a presumption of denial, he said, and the scope of items requiring a licence would not change.

This follows an announcement from US president Donald Trump earlier this month in which he confirmed, amid agreements reached during talks mounted at G20, that the controversial Huawei entity ban would be eased.

“Within those confines, we will try to make sure that we don’t just transfer revenue from the US to foreign firms,” he said.

Ripples of impact

The US placed Huawei on a trade ban list that effectively barred US companies from selling any hardware or software to the Chinese telecoms. The government at the time cited the broader threat to national security as reason for the ban.

The semiconductor industry lobbied the US government to be allowed to sell non-sensitive items

Huawei’s business has unquestionably suffered as a result of a ban; the company was forced to cancel the launch of its Matebook laptop due to blacklisting. The Matebook relies on Intel chips and Microsoft software, and both companies are effectively barred from working with Huawei due to the ban.

The company also estimated that its international smartphone shipment would take a hit in the range of 40pc to 60pc – a level of damage that even Huawei founder Ren Zhengfai didn’t anticipate.

The ban sent a ripple through the world of business, even pulling Samsung into the black hole of financial strife by impacting its chip business, according to some analysts.

Though the ban will likely come as a relief to both Huawei and its sales partners, industry observers have argued that the latest comments lack clarity.

“The actual policy, of what is not going to endanger US security, is not clear,” Washington trade lawyer Doug Jacobson said to Reuters. “The only way that industry can determine the line is by submitting [licence] applications and knowing what types will be approved and which types will be denied.”

Eva Short is a Journalist at Siliconrepublic.com

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