Allowed Huawei Sales Still Have No Specific Guidelines

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It has been one month since President Trump told Chinese President Xi Jinping and American companies that sales between American high-tech companies and Huawei would resume, but there are still no specific guidelines for allowed Huawei sales.

The US and China are preparing for trade negotiations in Shanghai this week, but Huawei sales in the US are still shrouded in mystery. No one knows what is being allowed for sale and what isn't. Trump and his administration said last month that American companies would be able to sell to Huawei products and services that do not compromise national security, but the decision to allow high-tech companies to sell mobile device components seems to stretch on the line of national security. Huawei is being allowed to still release Android devices running Android 9.0, devices that can still be accessed by American smartphone buyers — though shipping companies like FedEx are refusing to ship Huawei devices (as a concession to its government).

The cases for selling licenses, which Trump has granted to Huawei while it is still on the US Entity List, is a bit of "hit-and-miss." The administration has said it would go on a case-by-case basis to determine which selling licenses would and would not be granted, but again, there's nothing intentional about the licenses. No one knows the requirements for what works and what doesn't. "At this stage, there is mass confusion," that case-by-case basis "maximizes the uncertainty," said former Commerce official William Reinsch.

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The case of which selling licenses will be granted and which will not is up in the air, a matter of presidential preference rather than a guided principle to protect the American people.

Trump and Jinping will meet in Shanghai this week, with Huawei and China's less-than-stellar agricultural investment the key topics of negotiation talks. Huawei is a large entity in China, so much so that even Nokia CTO Marcus Weldon has testified to the corporation's government subsidies. Evidence has surfaced in recent weeks that the Chinese Government and military (People's Liberation Army or PLA) work closely with Huawei. Huawei employees have strong military background experience, and Huawei employees publish technological research papers with the military — having the Huawei logo proudly displayed on those research papers. Huawei CEO Ren Zhengfei worked in telecommunications while in the PLA, himself having military experience.

So, it makes sense as to why Chinese President Xi Jinping said before meeting Trump at the G20 summit in Osaka that the US would have to drop the Huawei ban before talks would resume. China won't cooperate unless Trump relaxes his tough economic policy on Huawei. And there's a good reason for China's stance: because Huawei is Shenzhen's Pride and China's favorite "son."

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Trump is giving a lot of concession to China, keeping Huawei on the Entity List while still letting American firms sell to the banned manufacturer and Android OEM. Most companies that end up on the Entity List never get approved selling licenses for American companies. Huawei is an exception to the rule.

Here in the US, a number of high-tech companies such as Intel, Qualcomm, and Micron have resumed sales to Huawei. Since Trump's Executive Order against Huawei in mid-May, a number of companies have stopped selling Huawei devices and services. Here in the US, online retailer Amazon was offering free returns for Huawei devices but is now back to selling them in full force. American shipping company FedEx has refused to ship Huawei phones but is going to court over the issue because it is displeasing customers.

The one silent party in the Huawei Ban is Google, who has said next to nothing since issuing its Android license revocation to Huawei in mid-May and making a case where it's better Huawei have Google's Android than not because of the security risks such a mobile setup could create. Google has said nothing since, allowing certain Huawei devices to make their way back into the Android Q Beta but leaving it at that. The Android license revocation for Huawei is still in effect and could come to fruition on August 19th.

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Some see the President's stance toward China as nothing more than a fishing expedition. "It's par for the course for this administration. They are making up policy as they go along based on the president's direction," said trade lawyer Doug Jacobson.

Congress believes the same, otherwise, it wouldn't have introduced bills into the House and Senate designed to prevent Trump from taking Huawei off the Entity List at his own presidential whim. The "Defending America's 5G Future Act," introduced in the Senate, denies Trump the right to remove Huawei without congressional approval. Congress can also approve and disapprove of Trump's approved selling licenses for Huawei sales during the ban, under the proposed law.

The talks at the Shanghai conference pertain to finances, not national security. And many seem to think that's all the Trump administration cares about.

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