Nov 4th, 2019

With 260 trade ban exemption requests from U.S. companies, the government has announced that quite a few U.S> companies will soon be able to resume doing business with Huawei. While this is good news for Huawei and the hundreds of U.S. companies that may soon be able to return to regular business operations, the U.S. government will not be green-lighting every request. Commerce Secretary Wilbur Ross admitted “that’s a lot of applications — it’s frankly more than we would’ve thought. Remember too with entity lists there’s a presumption of denial. So the safe thing for these companies would be to assume denial, even though we will obviously approve quite a few of them.”

The companies most likely to be granted a trade ban exemption are those with non-national security sensitive products that Huawei would be able to purchase just as easily from Japan, Taiwan or South Korea. 

The biggest question yet to be answered is if Google and Huawei will be able to resume their partnership. While Google doesn’t sell any tangible products to Huawei, the company has been barred from including Google’s software on its new smartphones. This hasn’t affected Huawei’s business in China and several other markets in Asia, but the company has had to ship several new smartphones in dozens of markets across Aisa and Europe which do not include the Google Play Store, leaving many users without access to the apps they are used to.

Unfortunately for U.S. service providers, the trade ban exemption will likely not apply to Huawei’s cellular infrastructure products since the U.S. government is in the process of banning Huawei’s products from the country’s communications grid. The fear is that the Chinese government could easily persuade Huawei to spy on our network.

Source: Bloomberg

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