US starts issuing licenses to companies wanting to trade with Huawei

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July 10, 2019
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Just after last week’s report where President Trump’s decided to allow American companies to trade with Huawei, the US government has now said that it will start issuing licenses to companies seeking to sell American products and services to China’s Huawei where there is no threat to national security.

The US Commerce Secretary Wilbur Ross while speaking at an annual department conference in Washington, said that Huawei would remain on the Entity List, which meant licenses would likely be denied and that the new policy would not change the scope of items requiring licenses. However, he also said there would be some approvals required for US companies wanting to trade with Huawei.

Furthermore, he also added that the Commerce Department will only issue licenses after evaluating the potential of national security risks linked to an agreement of a US company. As he stated;

“To implement the president’s G20 summit directive two weeks ago, Commerce will issue licenses where there is no threat to U.S. national security. Within those confines, we will try to make sure that we don’t just transfer revenue from the U.S. to foreign firms.”

Notably, it was not clear from the initial reports that whether this reinstatement of business with Huawei will also be applicable to software companies like Google. But now reports have confirmed that “while Trump didn’t specifically mention Google, Qualcomm, or Intel in the announcement”, it is a common understanding that “complex and highly scientific” products created by U.S. tech companies do include Google’s Android and Play Store services.

From the recent actions taken by US government, it has become evident that though Huawei will remain in the infamous Entity List, this is a positive step towards resuming normal operations and prevent large scale losses for both sides.

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