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Huawei vs the US: Trump allows trade with Huawei

1.7.2019

Translation: Eva Francis

The US President announced at a press conference that he’s allowing trade to resume between Huawei and the US. Huawei will stay on the so-called entity list and talks are set to resume.

US President Donald Trump made a media appearance at the G20 summit in Osaka, Japan, where he said:

We send and we sell to Huawei a tremendous amount of product that goes into the various things that they make. And I said that that's okay, that we will keep selling that product.

Donald Trump, Osaka, Japan, 29 June 2019

This story was picked up by business magazine Forbes as well as other media outlets around the world. Will these two sentences mark the end of the current round of trade wars between the US and China, which started in May when Huawei was blacklisted?

Huawei will stay on the entity list for now

The blacklist is also known as the «entity list». It details all of the current and possible trade partners of American firms that have been issued with a trade embargo from the US government. In other words, if a company is on the list, US enterprises can’t trade with them.

The Trump administration put Huawei, one of the biggest manufacturers of electronic devices, on the list. Experts and consumers alike thought this move was rather short-sighted, like shooting themselves in the foot and pretty stupid. However, the idea was simple: if China can’t deliver goods to the US anymore and isn’t allowed to distribute its knowledge and products, the US will have to create its own. This would in turn strengthen the domestic market, meaning the US would end up stronger than before. But that’s not how it worked out in reality. Instead, chip manufacturers such as Qualcomm, Intel and ARM – the latter was affected in certain interpretations of the law – knew how important the Chinese market was for their own companies. After all, Chinese hardware manufacturers are their biggest customers and they produce their goods in China. One of their biggest customers is Huawei.

They were having a problem. The companies were not exactly happy that they couldn't sell because they had nothing to do with whatever was potentially happening with respect to Huawei. So I did do that.

Donald Trump, Osaka, Japan, 30 June 2019

But all the same, Huawei is staying on the entity list for now. This round of the trade war isn’t over yet. The news portal Reuters cited a report from the Republican news group Fox News that quoted Larry Kudlow, National Economic Council chairman as saying: «All that is going to happen is Commerce will grant some additional licenses where there is a general availability.»

Moreover, Trump announced he will restart talks with Chinese President Xi Jinping to come to an agreement about the trade war. Kudlow, however, downplayed the issue. He explained there was neither a timetable nor concrete plans for when and how these talks would take place. The tariffs implemented by the Chinese as well as the Americans on materials of a total value of 325 billion US dollars are set to stay. But Kudlow ruled out the introduction of any further tariffs.

[The President] was very clear to say that American companies can supply Huawei with various products and services provided that there's no national security issues or problems

Larry Kudlow, Fox News, 30 June 2019

What about Hongmeng and all the others?

Trump and Kudlow’s announcements still leave questions unanswered. For instance, what’s going to happen with Huawei’s software side of things? Can the company work with Google again or is Huawei just on course to work with the basic version of Android, an alternative operating system such as Sailfish OS or Russian Aurora OS or even Huawei’s own Hongmeng OS, known internationally as Ark OS or Oak OS?

We’re still waiting on definite answers to these questions. But what we do know is this:

Devices that are being sold and in use right now will still be supported.
Android updates will continue as normal until the end of August.
The Trump administration and President Jinping will discuss licences about further trade.

And Kudlow is sure of one thing: «It is not the last word. The last word is not going to come till the very end of the talks.»

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Dominik Bärlocher

Senior Editor

dominik.baerlocher@digitecgalaxus.ch

Journalist. Author. Hacker. A storyteller searching for boundaries, secrets and taboos – putting the world to paper. Not because I can but because I can’t not.

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