U.S firms may get nod to restart Huawei sales in two-four weeks -Official

The U.S. may approve licenses for companies to re-start new sales to Huawei in as little as two weeks, according to a senior U.S. official; in a sign President Donald Trump’s recent effort to ease restrictions on the Chinese company could move forward quickly.

Huawei, the world’s largest telecommunications equipment maker, was added to a Commerce Department list in May that prohibits U.S. companies from supplying it with new American-made goods and services unless they obtain licenses that will likely be denied.

Donald Trump’s reversal

But late last month, after meeting with Chinese president Xi Jinping, President Donald Trump announced American firms could sell products to Huawei. And in recent days, Commerce Secretary Wilbur Ross said licenses would be issued where there is no threat to national security.

Trump’s reversal, and rapid implementation by the Commerce Department, suggests chip industry lobbying, coupled with Chinese political pressure, may well reignite U.S. technology sales to Huawei.

Two U.S. chipmakers who supply Huawei told Reuters in recent days they would apply for more licenses after Ross’s comments. They asked to remain anonymous.

A customer response management company and a firm that simulates cross-sectional radar for Huawei are also likely to file applications in the coming days, according to Craig Ridgley, a trade compliance consultant in Washington.

Out of $70 billion that Huawei spent buying components in 2018, some $11 billion went to U.S. firms including Qualcomm (QCOM.O), Intel (INTC.O) and Micron Technology (MU.O).

“Since there’s no downside, companies are absolutely submitting applications, as required by the regulations,” said Washington lawyer Kevin Wolf, a former Commerce Department official.

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.”

U.S. companies can currently sell goods in order to maintain existing networks and provide software updates to existing Huawei handsets, but are prohibited from making new sales of American-made goods and services.

One manufacturer’s representative was told by the senior U.S. official that licenses could be granted in two to four weeks at the conference on Thursday.

The person, who did not want to be identified, said the official did not delineate the criteria for license approvals, but she came away believing they would be made on a case-by-case basis, at least at first, as the agency seeks to form more broad opinions.

Source: Reuters