US to allow licensed sales to Huawei

BEIJING • The US said it will grant licences allowing companies to export goods to Huawei Technologies, but will not remove the Chinese technology giant from an export blacklist, as talks between the world's two biggest economies resumed.

The Department of Commerce will "issue licences where there is no threat to US national security", though Huawei will continue to face export controls, Commerce Secretary Wilbur Ross said on Tuesday in Washington.

The move clarifies President Donald Trump's remarks that he will allow US companies to resume supplying some of their products to Huawei, after meeting his Chinese counterpart Xi Jinping in Osaka, Japan, last month.

Top negotiators from both countries talked by phone on Tuesday for the first time since the two leaders agreed to a tentative truce.

"Within those confines, we will try to make sure that we don't just transfer revenue from the US to foreign firms," said Mr Ross.

"Huawei itself remains on the Entity List, and the announcement does not change the scope of items requiring licences from the Commerce Department, nor the presumption of denial."

The Entity List is often reserved for rogue regimes and their associated companies as a way to prevent US-origin items from flowing to them.

Like Mr Trump and other high-level United States officials, Mr Ross did not specify a timeframe or elaborate on what constitutes a national security threat.

The Entity List is often reserved for rogue regimes and their associated companies as a way to prevent US-origin items from flowing to them.

Even before Mr Trump's Osaka announcement, a number of American suppliers, including Micron Technology and Intel, had already resumed selling certain products to Huawei after concluding there were legal ways to bypass the ban.

 
 

The chipmakers are taking advantage of certain exceptions to the US export restrictions.

If less than 25 per cent of the technology in a chip originates in the US, for example, then it may not be covered by the ban, under current rules.

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A version of this article appeared in the print edition of The Straits Times on July 11, 2019, with the headline 'US to allow licensed sales to Huawei'. Print Edition | Subscribe