Trump Ban Reversal On Huawei Is "Not A General Amnesty"

At the G-20 summit in Osaka Japan this past weekend, US President Donald Trump agreed to soften the ban on Huawei Technologies Co., but this isn't a general amnesty for the Chinese corporation according to White House economic advisor Larry Kudlow.

"This is not a general amnesty, if you will. Huawei will remain on the so-called entity list where there are serious export controls and in national security inferences or suggestions there won't be any licenses," said Kudlow.

President Trump said that he made this U-turn due to the request of high-tech American companies, most notably the likes of Broadcom, Qualcomm, Intel, and others, who stood to lose billions of dollars in the Huawei ban. The ban not only bars Huawei products from selling in the US, but also barred American companies from selling to Huawei. Huawei's investments into American corporations totals some $11 billion annually.

Semiconductor companies have already started to suffer in light of the ban, which was initiated on May 15 by the President himself. VanEck Vectors Semiconductor ETF is an example of a financial victim in the trade war: half of its 25 stocks were at bear market levels one week after the Huawei Ban was enacted.

Since Huawei is the second top smartphone maker globally, it's likely the case that chipset maker Qualcomm saw some major financial decline as well. Qualcomm SoCs go into smartphones all across the world, especially into smartphones that enter into the US, Canada, and China.

US Republican Senator Marco Rubio, who, upon hearing of a possible decision by Trump to include Huawei in a trade deal negotiation with China, said at the time that he wouldn't approve of such a deal. Rubio now says that, in the event the President rolls away the current trade deal restrictions against the Chinese corporation, Congress will have to enact legislation to put those restrictions back in place.

Huawei has also been hurt financially in the ban. Huawei CEO Ren Zhengfei says that Huawei will see a financial loss of $30 billion over the next two years, but American tech companies hurt as well -- which explains their plea to President Trump about lifting the trade restrictions. Huawei has also seen a 40% smartphone decline in Europe in places such as Germany and Spain, and the Chinese corporation will have to ax its upcoming Matebook laptop as a result.

While some restrictions of the Huawei Ban have been lifted, not all have. Ludlow says that Huawei will not receive any licenses during this time. What this means is that Huawei is still under the watchful eye of the government. American companies selling to Huawei doesn't hurt national security because Huawei isn't selling to American companies but rather, buying from them. Trump is allowing the lift on the selling restriction because of his desire to see American companies make money and not lose money.

The real issue behind the Huawei Ban is Huawei's own telecommunications gear and its mobile software that are both considered to be full of vulnerabilities and backdoors, potential targets of exploitation and espionage by the Chinese Government. Huawei is still considered to be a threat to national security, such that the US has not yet turned over Huawei's telecommunications gear that it seized in Alaska some twenty months ago.

Since there are no licenses being granted and Huawei is still on the US Entity List, Google still isn't lifting its Android license revocation that's set to go into effect on August 19th. And even though Huawei is bringing Android 10.0 Q to current Huawei devices, it's future is still uncertain as it looks to lose its Android ties on August 19th. And smartphone sales in Europe, Huawei's largest market outside China, will still suffer because Europeans won't buy a smartphone that isn't running Google's Android.

The negotiation decision from President Trump is a good compromise for the sake of America's financial health, but it's interesting that Chinese President Xi Jinping agreed to it -- considering that he said he would only agree to a deal if the tariffs were lifted (they've been suspended for now in the trade talks) and Huawei's ban was completely lifted. The ban isn't entirely lifted just yet.

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About the Author

Deidre Richardson

Staff News Writer
Deidre Richardson is a tech lover whose insatiable desire for all things tech has kept her in tech journalism some eight years now. She is a graduate of the University of North Carolina at Chapel Hill, where she earned BA degrees in both History and Music. Since graduating from Carolina in 2006, Richardson obtained a Master of Divinity degree and spent four years in postgraduate seminary studies. She's written five books since 2017 and all of them are available at Amazon. You can connect with Deidre Richardson on Facebook.