U.S. Begins Granting Exemptions to Huawei Blacklist -- Update

Date : 11/20/2019 @ 6:11PM
Source : Dow Jones News

U.S. Begins Granting Exemptions to Huawei Blacklist -- Update

By Katy Stech Ferek 

WASHINGTON -- The Trump administration has given permission to some U.S. suppliers to Huawei Technologies Co. to resume shipping to the Chinese telecom giant, easing export restrictions while U.S. negotiators struggle to wrap up the first stage of a trade deal, the Commerce Department confirmed Wednesday.

Commerce officials put Huawei on an export blacklist in May, citing national security concerns. U.S. officials have warned that Huawei products could be used to spy on or disrupt telecommunications networks, which the telecom giant denies.

But President Trump, meeting with Chinese President Xi Jinping on the sidelines of the Group of 20 summit in Osaka, Japan, on June 29, agreed to ease the blacklisting for cases that didn't involve national security.

In remarks made late Tuesday on Fox Business Network, Commerce Secretary Wilbur Ross said he has begun to authorize some of those license applications.

"We've now been starting to send out the 20-day intent-to-deny letters and some approvals," he said.

The Wall Street Journal reported last month that the White House had signed off on special licenses for some U.S. companies to do some business Huawei.

The blacklist cut the equipment maker off from some U.S. chip makers and other companies that sent $11 billion of components to Huawei last year. Some chip makers cut revenue forecasts, even as some determined they could still sell Huawei certain products made outside the U.S. without violating export controls.

The Trump administration's blacklisting of Huawei cast a deep shadow over the trade negotiations. Offering a reprieve through the licenses granted Wednesday is seen as constructive for negotiators seeking to remove some irritants during trade talks and potentially achieve a limited "phase one" deal that Mr. Trump outlined last month.

"I read Huawei as, 'I want to keep the door open for a deal,' so it's positive right now," said Derek Scissors, a trade expert at the American Enterprise Institute who has advised the Trump administration. "This is a goodwill gesture to the Chinese that matters to them in managing their own hawk-dove debate.

Huawei couldn't immediately be reached for comment.

In an interview with the Journal earlier this month, Huawei Chief Executive Ren Zhengfei said dismissed Washington's campaign against it as ineffective, saying it had found other suppliers to make up for the loss of U.S. chips and other components.

Write to Katy Stech Ferek at katherine.stech@wsj.com


(END) Dow Jones Newswires

November 20, 2019 12:56 ET (17:56 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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