It’s been about six weeks since Huawei was put in the US government’s “Entity List,” which bars the Chinese company from buying technology from US companies. Well, in a recent turn of event, it appears the situation would improve for Huawei…ever so slightly.
At the G20 Summit in Japan, US President Donald Trump met with Chinese President Xi Jinping. After said meeting, Trump indicated that trade talks between the two countries will resume, and US companies would be permitted to do business with Huawei again. However, that’s not the whole story.
Following Trump’s statement at the G20 Summit, White House Economic Advisor, Larry Kudlow, elaborated that this does not put Huawei off of the Entity List. Instead, more licenses will be granted to Huawei to buy technology from US companies if the sales pose no threat to national security. “The national security concerns will remain paramount,” Kudlow said.
On top of that, these additional licenses will only be granted if “there is a general availability” on the parts Huawei are looking to get. Among these are chips that the company would need to manufacture its smartphones.
That is not the end of it, of course. Now that US is resuming trade talks with China, it was mentioned that Huawei will be a part of the ongoing discussion. Basically, Trump’s statement at the G20 summit “is not the last word,” Kudlow added.
Right now, Huawei is in a bit of a limbo. Until trade talks between US and China conclude, the fate of the Chinese company is still uncertain. As it is, Huawei will remain in the Entity List, so it still can’t conduct business with US companies effectively.
Being placed in the Entity List is already hitting Huawei hard. The company expects to take $30 billion in losses (that’s a whopping RM124 billion) over the next two years, it’s no longer allowed to use microSD cards in its smartphones, and even its rapidly growing laptop business is put on halt, to the point where it had to cancel an upcoming laptop.
More importantly, Google also pulled Huawei’s Android license because of the restriction, which is arguably one of the most important parts of the puzzle. Nonetheless, Huawei’s situation is slowly getting better, though it’s still far from a proper resolution. Hopefully, it won’t be long until Huawei can get back to the market in earnest.