The Trump administration made an announcement to make a significant relaxation of its restrictions on US companies selling to Huawei, saying the ban will only apply to products that are related to national security. Although officials said that the Chinese tech giant would still remain on the Entity List.
The New York Times reported on a speech given on Tuesday by Wilbur Ross, the US commerce secretary, he said that his department will issue licenses where there is no threat to US national security. However, he clarified that Huawei itself remains on the Entity List, and the announcement does not change the scope of items requiring licenses.
These comments definitely clarify President Trump’s surprise announcement last month, after a meeting with Chinese President Xi Jinping, that the United States would relax restrictions on Huawei as part of an effort to restart stalled trade talks with China.
At a CNBC event on the same Tuesday Larry Kudlow, the director of the White House National Economic Council, said that the United States has opened the door, relaxed a bit, the licensing requirements from the Commerce Department for companies that sell to Huawei.
“We are opening that up for a limited time period,” Mr. Kudlow said. Meaning the licenses could stop coming if the trade talks don’t progress smoothly, according to the Financial Times.
The move may be for a limited period of time, but it marks a major victory for technology companies like Intel and Qualcomm that have been lobbying hard to continue selling to Huawei. These companies say that the ban will cut them off from a major source of revenue considering Huawei can easily purchase some less-advanced components from competitors in Japan, South Korea or elsewhere instead. They have also claimed that consumer products like smartphones and computer servers do not present security issues in the same way as critical equipment infrastructure.
Whether those trade talks can result in a trade deal is not yet clear because neither Mr. Ross nor Mr. Kudlow said how long the relaxation to the ban would last. These leaves open the possibility that licenses could dry up once again if there is no progress in the trade talks.