WASHINGTON: The US government will issue licences to companies seeking to sell goods to China’s Huawei where there is no threat to national security, Commerce Secretary Wilbur Ross said on Tuesday, leaving industry observers unsure about which products will pass muster.
Seeking to revive trade talks with China, President Donald Trump announced last month that American companies would be allowed to sell products to Huawei Technologies Co Ltd, the world’s largest telecommunications equipment maker.
Trump’s comments came after the United States placed Huawei on the Commerce Department’s so-called Entity List in May over national security concerns. US parts and components generally cannot be sold to those on the list without special licenses.
While American chipmakers welcomed Trump’s announcement, many industry and government officials were confused about the new policy.
Speaking at a conference in Washington, Ross affirmed that Huawei would remain on the Entity List, meaning winning licenses would require overcoming a presumption of denial, and said the scope of items requiring licenses would not change. However, he opened the door to some approvals.
“To implement the president’s G20 summit directive two weeks ago, Commerce will issue licences where there is no threat to US national security,” Ross said, referring to Trump’s announcement at the meeting of world leaders in Japan.
“Within those confines, we will try to make sure that we don’t just transfer revenue from the US to foreign firms,” he said.
After Huawei was added to the Entity List, the semiconductor industry lobbied the US government to be allowed to sell nonsensitive items that Huawei could easily buy abroad, arguing that a blanket ban would harm American companies.
Industry observers said Ross’ comments lacked the clarity and relief many hoped for after Trump’s announcement.
“The actual policy, of what is not going to endanger US security, is not clear,” Washington trade lawyer Doug Jacobson said. “The only way that industry can determine the line is by submitting (license) applications and knowing what types will be approved and which types will be denied.”
Separately, White House economic adviser Larry Kudlow told an event hosted by CNBC that relaxed US government restrictions on Huawei could help the technology giant but would only be in place for a limited time.
He said US government purchases of Huawei parts, components or systems would remain off-limits, as would any transactions involving 5G, but the licensing requirements had been relaxed for so-called general merchandise that involved “no national security influences or consequences.”
That meant some chip companies would be permitted to sell to Huawei, on a limited basis, items generally available on the global market, including from vendors in South Korea, Taiwan and Vietnam, he said.
“We are opening that up for a limited time period,” Kudlow said. “So that’s important and, I guess, does provide some relief to Huawei.” He did not specify how long the relaxed licensing guidelines would be in effect.
— Reuters
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