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Trump says US companies can continue to sell to Huawei, as trade talks with China resume

Barely a month after the US government banned American companies from doing business with Huawei, a company which it considers a national security threat, President Donald Trump said in a press conference towards the end of the G20 summit on June 29 that American companies could sell their equipment to the Chinese firm. Following his meeting with Chinese President Xi Jinping at the summit, Trump announced that the two countries would resume trade talks and that the US would hold off on implementing new tariffs indefinitely. He reiterated this decision on Twitter, and added, ‘I agreed to allow Chinese company Huawei to buy product from them which will not impact our National Security’ [sic].

Trump’s announcement came just days after the Wall Street Journal reported that China had insisted on a reprieve for Huawei as a precondition for trade talks between the two countries. According to a CNN report, White House economic adviser Larry Kudlow said on Sunday that Trump’s move did not amount to amnesty for the Chinese firm, reiterating that Huawei could resume buying from US companies as long as it didn’t present a national security concern. The Commerce Department would “probably” look at how to “grant some temporary licenses” for US companies to resume business with Huawei, the report said.

Google could restore Huawei’s licence soon

A report by PCWorld said that while it was unclear whether the reprieve would extend to Huawei’s 5G technology, it would certainly apply to Google and Android. Google was one of the first companies to act against Huawei, pulling its Android licence just days after the American government added the company and 70 affiliates to its so-called Entity List in May. Companies on the Entity List are barred from doing business with US companies without government approval.

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Google’s decision meant Huawei would have only been able to use the public version of Android, known as the Android Open Source Project, and would have lost access to use Google’s proprietary apps and services such as the Play Store, Gmail and YouTube. These are not covered by the open source license and require a commercial agreement with Google. Though the US had temporarily rolled back some of the restrictions on Huawei on May 20 by granting it a 90-day licence to buy American goods, the company had already begun working on an alternative operating system to Android. It had also tried to rope in other Chinese phone brands such as Oppo, Vivo, and Xiaomi as partners. Now, the company will have to decide whether to continue depending on Android to power its phones or make the shift to its homegrown OS.

Chipmakers lobbied US govt to ease restrictions

Trump’s u-turn also means Huawei is likely to resume business with US chipmakers Intel, Qualcomm, Broadcom and Xilinx, which had suspended shipments to it following the May sanctions. A CNBC report earlier this month revealed that the chipmakers were quietly pressing the US government to ease its ban on sales to Huawei. Executives from Intel and Xilinx met with Commerce Department officials in late May to discuss the issue, the report said, citing a source. Here’s what each company supplies to Huawei, per XDA:

  • Intel is Huawei’s primary supplier for chips used in its data centres and also provides processors for its Matebook laptops.
  • Qualcomm supplies Huawei with Snapdragon system-on-chips (SoCs) for various devices and some network chips. It also licenses the aptX high-definition codec for Bluetooth audio to the company. The impact here could be limited as Huawei builds its own mobile processors and modems.
  • Xilinx sells Huawei programmable chips for networking.
  • Broadcom supplies packet switching chips for telecom equipment.

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