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Huawei trade ban: US officials figure out how to handle Trump's U-turn

US companies will be able to get licenses to supply gear to Huawei, even though the trade ban remains in place.
Written by Liam Tung, Contributing Writer

The US Department of Commerce, which oversees restrictions on US companies supplying tech to Huawei, has outlined its plans for implementing US President Donald Trump's G20 announcement that the US is now to lift the ban.   

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Suggesting US-China trade discussions were back on the table, Trump announced that, "US companies can sell their equipment to Huawei" in cases where there's "no great national security problem". Exactly how it could be implemented hasn't been clear until now. 

The Department of Commerce added Huawei to its 'Entity List' in May, prompting key partners, including Android maker Google, and chipmaker Arm to sever supplies to the Chinese network and smartphone giant.

SEE: IT pro's guide to the evolution and impact of 5G technology (free PDF)

Wilbur Ross, secretary of Commerce, has now clarified that the department will "issue licenses where there is no threat to US national security".

Huawei is to remain on the Entity List, which still bans US companies generally from supplying tech to it, but in some cases certain firms will be able to resume supplying approved technology with the company after obtaining a license. 

"Within those confines we will try to make sure that we don't just transfer revenue from the US to foreign firms. Huawei itself remains on the Entity List, and the announcement does not change the scope of items requiring licenses from the Commerce Department, nor the presumption of denial," said Ross.

The impact of Huawei's addition to the Entity List echoed ZTE's fate following its addition in 2016, which essentially killed its US business. Shortly after Huawei's ban, the company's founder Ren Zhengfei forecasted that its sales, which amounted to $100bn in 2018, would decline by $30bn over the next two years.  

On the other hand, Zhengfei has also claimed that the ban wouldn't impact its business much since the most advanced part of its operations lies in the chips it makes.

The company also says it has made progress with its replacement for Android, known as Hong Meng, which Zhengfei argues is much faster than Android. But again, the messaging is understandably mixed – Huawei has said repeatedly it would actually prefer to continue using Android.  

Trump in late May flagged that the ban on Huawei could be resolved if China was willing to do a trade deal. So far, the standoff between the two nations has resulted in increased tariffs from both sides.  

As per The New York Times, Larry Kudlow, the director of the White House National Economic Council, this week said the US has "opened the door" for companies that supply Huawei and that it has "relaxed a bit the licensing requirements from the Commerce Department". 

Kudlow also said the headline is that trade negotiations with China are "set to resume". 

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