American technology companies that had hoped to soon resume sales to Huawei may have to keep waiting.
The White House plans to delay a decision on granting licenses that would allow US companies to sell to Chinese tech firm Huawei, according to a report from Bloomberg citing people familiar with the matter. This comes after the end to the US-China trade truce — China on Monday halted purchases of American agricultural products and fears have escalated of a possible currency war between the two countries. And it’s another blow to tech companies hurt by the new hike in tariffs on Chinese goods announced by President Donald Trump last week.
The Department of Commerce said it could not confirm the licensing news and declined to comment. Commerce Secretary Wilbur Ross previously said decisions on the more than 50 license applications the department has received could begin this week.
“We’re not gonna do business with Huawei,” President Trump told reporters on Friday, seemingly confirming the report. “It’s much simpler not to do any business with Huawei, so we’re not doing business with Huawei.”
The Chinese telecom giant has become a bargaining chip in the US-China trade war. In May, the Trump administration placed Huawei on its Entity List, restricting US companies from selling to it without a license. That action harmed Huawei, which relies heavily on products from US suppliers such as Intel (INTC) and Google (GOOG), especially for its dominant smartphone business. It also hurt sales at some American tech companies for which Huawei is a major customer.
US tech companies have urged the White House to allow them to resume the sales, and some found ways to restart some shipments to Huawei without violating the Entity List restrictions.
Trump in June said he would ease restrictions on Huawei by granting licenses to American firms to resume sales of products that do not pose a national security risk, though it was not clear exactly which products that includes. Two weeks ago, he met with the heads of seven US suppliers to Huawei, including Qualcomm (QCOM), Google, Intel and others.
“They requested timely licensing decisions from the Department of Commerce, and the President agreed,” the White House said in a statement on the meeting.
American lawmakers have long feared that Huawei poses a threat to US national security, something the Chinese company strongly denies. The company’s Chief Security Officer Andy Purdy last month told CNN’s Julia Chatterley the ban on sales to Huawei wouldn’t keep America safe, but it could cost American jobs at its US suppliers.
“Given the United States’ vulnerability in cyberspace, I think the government is bending over backwards to make America safe, but they’re going too far,” Purdy said. “If we are forced to go our way, we’ll be okay. But in the long term, I don’t know that Huawei will come back (to America) and I think America will be hurt.”
Indeed, American companies appear to be concerned about the impact of ongoing trade tensions.
“Tariff and trade uncertainties created anxiety across our customer supply chains,” Intel CEO Bob Swan said on a conference call with shareholders on July 25.