Over 130 requests from US firms to sell to Huawei

Huawei, the world's no. 2 smartphone maker, was placed on the list because of US national security concerns in May, when trade talks with China broke down.
Huawei, the world's no. 2 smartphone maker, was placed on the list because of US national security concerns in May, when trade talks with China broke down.PHOTO: REUTERS

Sources say no licences granted yet, almost 2 months after Trump says some sales allowed

WASHINGTON • The US Commerce Department has received more than 130 applications from US firms for licences to sell goods to China's Huawei Technologies, three sources said, nearly two months after President Donald Trump said some sales would be allowed.

But the Trump administration has not yet granted any licences for sales to the blacklisted company, said people familiar with the process, who spoke to Reuters on condition of anonymity.

The standstill coincides with mixed messages from Mr Trump in the US-China trade war, which have dimmed hopes for prompt decisions on licence applications to sell to Huawei, the world's top producer of telecoms equipment.

That has raised the spectre of billions of dollars of lost sales for chipmakers, software companies and others in Huawei's US supply chain.

"Nobody in the executive branch knows what (Mr Trump) wants and they're all afraid to make a decision without knowing that," said Mr William Reinsch, a former Commerce Department official.

Last week, Mr Trump vowed to raise tariffs on US$550 billion (S$764 billion) in Chinese imports, hours after China imposed new levies on US$75 billion in US goods. Then he softened his tone towards China at the Group of Seven leaders' meeting over the weekend, saying he thought the world's two largest economies would reach a deal to end the tit-for-tat trade war that has roiled markets and hammered growth.

The number of licence applications far exceeds the 50 or so that US Commerce Secretary Wilbur Ross disclosed receiving in July.

A Commerce Department spokesman said: "The inter-agency process, weighing licence requests concerning Huawei and its non-US affiliates, is ongoing."

Huawei did not immediately respond to a request for comment but has called for the US to remove the company from the so-called entity list and put an end to what it called "unjust treatment".

Huawei, the world's No. 2 smartphone maker, was placed on the list because of US national security concerns in May, when trade talks with China broke down. There is a ban on sales of US goods to companies on the list, unless suppliers obtain special licences, a process which involves tough scrutiny.

The US, which says Huawei can spy on its customers, has sought to convince allies to exclude the company from their 5G networks.

Huawei denies the allegations.

Seeking to lure China back to the negotiating table in late June, Mr Trump promised President Xi Jinping that US companies would be allowed to make some sales to Huawei, a gesture welcomed by US chipmakers and software companies. Huawei spent US$11 billion on US components from companies such as Intel, Qualcomm and Micron Technology last year.

Government officials urged US companies to apply for licences following Mr Trump's pledge of relief, saying exports to Huawei of non-sensitive items that are readily replaced by foreign competitors would be permitted. Mr Ross and Mr Trump in July promised timely responses.

 
 
 

One of the sources noted that the review process was not delayed, pointing to the complexities of inter-agency consultation.

But the only relief seen by Huawei is the extension of the temporary general licence, which gives US companies a small exception to repair and maintain Huawei's existing handsets and networks.

China expert Derek Scissors of the American Enterprise Institute said a breakthrough in US-China trade talks could spur licence approvals for Huawei as soon as next month. Trade teams from the two countries are due to meet in September in Washington, but no specific dates have been disclosed.

According to three Commerce Department officials, many of the licence requests have been reviewed by other agencies such as the departments of state and defence.

However, no standards have yet been set and no responses have been issued as officials await a green light from Mr Ross and the White House.

A version of this article appeared in the print edition of The Straits Times on August 29, 2019, with the headline 'Over 130 requests from US firms to sell to Huawei'. Print Edition | Subscribe