Some Huawei suppliers get US approval to restart sales to blacklisted firm

Reuters , Wednesday 20 Nov 2019

An illuminated Huawei sign is on display during the 10th Global mobile broadband forum hosted by Huawei in Zurich, October 15, 2019, AFP

The Trump Administration on Wednesday gave Huawei its second reprieve this week, allowing some suppliers to the Chinese telecoms giant to restart sales to it after it was placed on a trade black list over national security concerns six months ago.

The Commerce Department said it has begun issuing licenses for some companies to sell goods to Huawei, expanding the company's supplier base and providing long-awaited clarity to the industry that once sold it billions of dollars worth of goods.

"The Department is issuing these narrow licenses to authorize limited and specific activities which do not pose a significant risk to the national security or foreign policy interests of the United States," the Commerce Department said in a statement.

It was not immediately clear which products had been approved for sale to the world's top telecommunications equipment maker. But Huawei Technologies Co Ltd, also the second largest smartphone maker, has been anxiously awaiting a license for Alphabet Inc's Google to supply its mobile services to new models. Google declined to comment.

Companies began receiving notices of approval and "intent to deny" notices from the Commerce Department on Wednesday, two industry sources said, as US President Donald Trump seeks to close a partial trade deal with Chinese President Xi Jinping.

US Commerce Secretary Wilbur Ross told Fox Business Network late on Tuesday that the department has "had 290-something requests for specific licenses. We now have been starting to send out the 20-day intent to deny letters and some approvals."

The move also came after the Commerce Department renewed the so-called temporary general license for the company for a third time on Monday, extending permission for Huawei to engage in limited transactions to assist US rural network operators.

The Trump administration is working to sign a phase one trade deal with China to end a tit-for-tat trade war that has roiled markets and hit global growth.

"The White House isn't ready to pull the plug on Huawei because that would do almost as much harm to US companies, but they're keeping it in reserve," said James Lewis, a technology expert with the Washington-based Center for Strategic and International Studies.

The Semiconductor Industry Association, a trade group, welcomed the Commerce Department's announcement, saying sales of the non-sensitive products help ensure the competitiveness of US chipmakers, "which is essential to national security."

"We hope license approvals continue to proceed in an appropriate and timely manner," the group added

The United States has pending cases against Huawei for allegedly stealing American intellectual property and violating Iran sanctions. The administration has also lobbied US allies to keep Huawei out of next-generation 5G telecommunications infrastructure.

The Trump administration put Huawei on a trade blacklist, citing national security concerns in May after trade talks broke down. Companies on the list are not allowed to receive shipments of US goods without a special license from the Commerce Department.

But in June, US President Donald Trump said some sales would be allowed to the company, and US officials urged firms to apply for licenses, noting that they would be granted in cases where the items were readily available and did not compromise national security.

But until Wednesday, there had been no responses on the license requests. Still plenty of headwinds remain for Huawei, which is still awaiting rules from the Commerce Department that are expected to bar them from the US telecoms network.

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