US gov still open for Huawei trade, if it's safe

Commerce Department will issue licenses where there is "no threat to US national security"

Donald Trump

The US government has said it will grant licenses to companies that want to sell goods to Huawei if it deems it safe to do so. But, it hasn't specified what products that extends to.

Commerce Secretary Wilbur Ross made the comments on Tuesday at a conference in Washington but added that Huawei would remain on the entity list - which it was placed on in May.

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

Last month, President Donald Trump seemed to soften his stance on the Chinese telecoms giant at the G20 summit, announcing that US companies would be allowed to sell products to it. But the stipulation that US parts and components generally cannot be sold to those on the list without special licenses has caused confusion.

A big question in this case, specifically for Huawei, is what does the US deem a security risk. Huawei is a major player in 5G infrastructure, but also one of the biggest smartphone manufacturers in the world and as such, it imports lots of goods and services from the US.

Semiconductor Chips

In the aftermath of the ban, the semiconductor industry was one of the first to react. US chipmakers including Intel and Qualcomm reportedly met with the Commerce Department suggesting that restrictions on trade between Huawei and US companies could adversely affect sales and revenues.

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Part of the argument from chipmakers is that alleged security flaws are only present in its 5G infrastructure and not in commonly available equipment from other areas within Huawei, such as its smartphone business.

Last month, a number of global semiconductor firms slashed sales forecasts amid slowing market. Cardiff based company IQE, which estimated it would fall significantly short of its predicted earnings, blamed the Huawei trade ban.

Android

Arguably one of the biggest issues for Huawei was how the ban would affect its mobile phone business. The company uses Google's Android platform including native Google apps, but future access to those apps and the Google Play Store was put in doubt with the trade ban.

Google suspended business with Huawei shortly after the announcement of the ban, ceasing the supply of hardware, software and technical services in accordance with President Trump's executive order. Any Huawei phone, like the P30 line, would not be able to use come with apps such as Gmail, Drive, YouTube, and would not have access to the Play Store.

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Not long after, reports surfaced suggesting Google tried to make a case to the US government that it needs to be able to provide technology to Huawei for national security, claiming a 'forked' version of Android would be less secure, if Huawei builds its own mobile operating system based on the open-source version of Android. 

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