Nov 21, 2019

Huawei gets a win on U.S. export waivers

Photo illustration: Budrul Chukrut/SOPA Images/LightRocket via Getty Images

After months in which the Commerce Department indicated it might ease some trade restrictions on Chinese tech giant Huawei, some U.S. companies are beginning to receive waivers allowing them to supply Huawei with components, according to reports in the Wall Street Journal and elsewhere.

Why it matters: U.S. companies were making millions of dollars selling chips, software and other components to Huawei until the Trump administration put the company on a trade blacklist, largely over national security concerns.

The big picture: Huawei is just one flashpoint in a broad U.S. dispute with China, one that extends beyond short-term conflicts over tariffs to broader issues like censorship, artificial intelligence, intellectual-property theft, spying and technology leadership.

  • As we have written, both China and the U.S. appear to crave a world in which they aren't reliant on one another in tech, but neither knows how to disentangle itself from the other.
  • The U.S. depends on China for the bulk of electronics manufacturing, while China still relies on a number of American components, including software and chips.

Huawei isn't the only company caught up in the dispute.

  • While its role as one of the key players in next-generation cellular technology has made Huawei a focus, U.S. attention has also fallen on Huawei's smaller Chinese rival, ZTE, as well as TikTok and a number of makers of facial recognition technology.

Meanwhile: Huawei's inclusion on the so-called entity list, which limits the ability of U.S. companies to sell goods and services to Huawei, is just one of several separate U.S. actions crimping the Chinese firm's business.

  • The FCC will consider on Friday whether to ban companies from using federal telecom subsidies to purchase communications equipment from Chinese firms Huawei and ZTE.
  • The Department of Justice has pending actions against Huawei accusing it of both theft of trade secrets from T-Mobile and violating trade sanctions against Iran.
  • A section of the National Defense Authorization Act prohibits Huawei and others from selling certain gear in the U.S. Huawei has sued the U.S. government, saying the law is unconstitutional.
  • A bill in Congress, H.R. 4459, would establish funds to help smaller carriers replace their current Huawei gear with equipment not alleged to pose a national security risk.
  • President Trump signed an executive order in May declaring a national emergency and prohibiting U.S. companies from using telecom services that are solely owned, controlled, or directed by a foreign adversary.

What they're saying:

  • Semiconductor Industry Association CEO John Neuffer said his organization welcomes the export license approvals. "Sales of these non-sensitive commercial products help ensure the competitiveness of the U.S. semiconductor industry, which is essential to national security."
  • Commerce Secretary Wilbur Ross, speaking to Fox Business: "We've now been starting to send out the 20-day intent-to-deny letters and some approvals."
  • Huawei declined to comment.

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