Business

U.S. says Huawei still blacklisted, except when it's not

Bloomberg, Reuters

The U.S. said it would grant licenses allowing companies to export goods to Huawei Technologies Co. but won’t 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 licenses where there is no threat to U.S. national security,” though Huawei will continue to face export controls, Commerce Secretary Wilbur Ross said Tuesday in Washington.

The move clarifies President Donald Trump’s remarks that he would allow U.S. companies to resume supplying some of their products to Huawei, after meeting President Xi Jinping in Osaka last month. Top negotiators from both countries talked by phone 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 U.S. to foreign firms,” Ross said. “Huawei itself remains on the entity list, and the announcement does not change the scope of items requiring licenses from the Commerce Department, nor the presumption of denial.”

Like Trump and other high-level U.S. officials, Ross did not specify a time frame 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 U.S.-origin items from flowing to them.

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

The chipmakers are taking advantage of certain exceptions to the U.S. export restrictions. If less than 25 percent of the technology in a chip originates in the U.S., for example, then it may not be covered by the ban, under current rules.

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 U.S. 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 U.S. government restrictions on Huawei could help the technology giant but would only be in place for a limited time.

He said U.S. 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.

Speaking at the same conference as Ross, Nazak Nikakhtar, the Commerce Department’s assistant secretary for industry and analysis and nominee to lead the department’s Bureau of Industry and Security, said the agency hoped to have decisions soon on export license requests from companies seeking to sell to Huawei.

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