According to a senior US government official, Washington might approve licenses which will allow US firms to resume sales with Huawei within two to four weeks. This comes as a possible attempt by President Donald Trump’s administration to ease restrictions on the Chinese tech giant.
Since May, Huawei has been added to a Commerce Department list. This list ensures US companies obtain a license before they can sell American goods and services to the tech firm.
However, last month, after holding talks with the Chinese president Xi Jinping, President Trump announced American companies could sell goods to Huawei. Currently, Commerce Secretary Wilbur Ross revealed that licenses would be issued when there is no threat to American security
Looking at recent actions by Trump and the Commerce Department, its safe to suggest possible chip industry lobbying and political pressure from Beijing might cause US firms to resume trade with Huawei.
According to Reuters, two anonymous US chipmakers who supply Huawei revealed that they would apply for licenses following the announcement made by the Commerce Secretary.
Furthermore, Craig Ridgley, a trade compliance consultant in Washington, claims that a customer response management firm and another tech firm might also be the next applicants for these licenses.
Out of $70 billion which Huawei spent on parts in 2018, US firms such as Qualcomm and Micron Technology received about $11 billion.
Kevin Wolf, a lawyer and former employee of the Commerce Department said “Since there’s no downside, companies are submitting applications, as required by the regulations,”
A Huawei spokesman said “the Entity list restrictions should be removed altogether, rather than have temporary licenses applied for US vendors. Huawei has been found guilty of no relevant wrongdoing and represents no cybersecurity risk to any country, so the restrictions are unmerited,” said a Huawei spokesman.
Presently, US firms are allowed to sell products used to maintain existing networks and enable software updates to current Huawei smartphones in the market. However, they are prevented from making new sales of American manufactured goods and services.
Also, not all sales by US firms to Huawei depend on the approval of license requests by the government. With this in mind, some American companies may not need licenses because their products are manufactured abroad with less US-made parts.
In recent weeks, American authorities have tried to explain the new policy. But they said that they would permit the sales of non-sensitive tech. However, they noted that Huawei remains on the entity list.
Many semiconductor firms have asked the US government to relax its trade restrictions and consider alternative policies. Also, these companies seek approval to service older contracts or make new deliveries to Huawei.
Last week some US suppliers were looking for answers at a Commerce Department conference held in Washington.
During the event, a senior US official informed a manufacturer’s rep that licenses could be approved in two to four weeks. According to the anonymous source, the official did not describe the criteria for license approvals. But she believes that such permissions depend on the case itself since the agency plans to form more comprehensive opinions.
When Reuters asked a Commerce Department spokesman for comments, the official said that the agency was “currently evaluating all licenses and determining what is in the nation’s best national security interest.”
Presently the US is accusing Huawei of violating Iran sanctions and stealing its American made intellectual property. Furthermore, the US government has called for its allies to prevent Huawei from taking part in the 5G telecommunications infrastructure space. This effort was carried out because the Trump administration believes the Chinese firm intends to spy on its customers. But Huawei has since refuted the allegations.
An ex undersecretary of commerce, Eric Hirschhorn claimed that the government officials tasked with reviewing the licenses do not have a clear picture of the US government’s policy.
Hirschhorn noted that “The policy two minutes ago may not be the policy two minutes from now.”