Some Companies Can Now Sell To Huawei To Further US-China Trade Talks


US-China trade talks have stalled since June, but US President Donald Trump is now allowing some companies to sell goods to Huawei.

"Non-sensitive" goods?

The key here is that the goods in question are "non-sensitive," apparently referring to Huawei as a national security threat. The goods in question then likely refer to much of anything except anything that threatens national security. As we've seen with the Trump administration before, these statements are vague and don't really reveal what qualifies and what doesn't.

Green Light Said To Further US-China Trade Talks

Some companies are being given the green light in Huawei sales, some say, because of the stalled US-China trade talks. Trump hopes that by allowing Huawei some leniency with regard to its Ban, Chinese President Xi Jinping will be more willing to work with the US and reach a resolution that benefits both parties.


In June, President Trump said that some progress had been made with Jinping's promise that China would invest in US agriculture, but Trump later said that Huawei wouldn't be a part of trade talks with China. Now it seems as though the President is willing to talk about Huawei — at least implicitly, if not directly.

Huawei seems to be the key between trade talks. Jinping said back in June before the G20 Summit in Osaka that he wouldn't negotiate unless Huawei was central to the negotiations.

Why Trump administration is approving selling licenses now

Yes, Trump is hoping to further negotiations and trade talks with this new approval of companies with selling licenses (which somewhat undoes the Ban in effect), but it could be that Trump is also doing this because of the role Huawei plays in next-generation 5G wireless. It's been said recently that Trump is looking to Ericsson and Nokia as telecom hardware suppliers, and US-based Altiostar as a uniform software supplier, for telecom gear, in light of the Huawei Ban. But Nokia and Ericsson may not be as competitive pricewise as Huawei.


One thing that has made Huawei a rival globally is its affordable pricing, which has moved American companies to heavily invest in Huawei products. One proposal from Congress at this point involves giving funds to companies and entities that would allow them to do away with their Huawei gear and purchase hardware from Nokia and Ericsson. Another concerns the companies themselves, as the President is considering giving government subsidies to Nokia and Ericsson so that they can offer their equipment more affordably than before — influencing American companies to buy from them instead of Huawei.

Altiostar says it's willing to provide the agnostic telecom software provided the Trump administration heavily emphasizes that telecom hardware suppliers adopt it.

But with all these considerations in place, perhaps it's the case that eliminating Huawei influence is a hard thing, if not downright impossible, to do.


Huawei owns 15% of all standards-essential 5G patents. The company is also the second top smartphone maker in the world, second only to South Korean juggernaut Samsung Electronics. And the company invests $11 billion annually into the US economy, one of the reasons that motivated Trump to do an about-face earlier this year and allow high-tech companies to start selling to Huawei again just weeks after Trump issued an Executive Order banning American companies from buying and selling to Huawei.

If the Trump administration is finally approving selling licenses after saying "no" to around 100 license applications earlier this year, then Huawei's hard-to-get-around influence must be the reason behind it.

Huawei, a national security threat

Since mid-May, Huawei has defended itself from the attacks of the Trump administration, saying that it isn't a security threat and that it isn't spying on American citizens, nor would it, despite what Beijing would or would not say. At one point, Huawei proposed that it sign a non-spying agreement, but that would clash with Chinese Law that mandates spying if the Beijing Government insists on it.


Huawei has said that it doesn't spy on its clients, otherwise it would not have those clients, but that simply isn't true. A Wall Street expose from this summer shows Huawei technicians setting up digital "safe cities" in the African governments of Uganda and Zambia. According to African citizens, Huawei was able to perform espionage on government enemies in two days as opposed to Israel's efforts to crack encrypted messaging platforms such as WhatsApp.

The company's work in espionage in other countries, as well as its own coordinated efforts to bring clients to Beijing and train their police forces there, for example (as Huawei did for the Ugandan police force) insists that Huawei is telling what people want to hear and hiding its true cards.

Huawei has even said that it will open up its 5G standards-essential patents in collaboration with a Western country, in hopes of eliminating the idea that it spies on its customers.


Some have said that Huawei should make its telecom software open-source so it can't be accused of espionage. Huawei has created a new operating system, HarmonyOS, and made it open-source to encourage adoption. Huawei Chief Security Officer (CSO) Andy Purdy has said that there's too much financially at stake for Huawei to make its telecom software open-source and give away trade secrets.

Huawei in negotiations

From the beginning, China has insisted on Huawei being at the center of trade talks, but the question on the table is "why?" Why does it matter what the US says or does regarding Huawei, if the country plans to restore some diplomatic relations with China?

It matters because Huawei is China. Huawei is state-sponsored and government-owned, with CEO Ren Zhengfei owning a mere 2% of the company. Huawei has never revealed who owns the other 98% but again, with "government officials" attending all Huawei's affairs, it doesn't take a rocket scientist to know that the company is an arm of the Chinese state.


Once again, Huawei is at the heart of negotiations with Trump, who said earlier that he wasn't going to talk about Huawei. But Trump wants to reach a solution with China.

Why? Why does it matter to reach a solution with China if Huawei really is a security threat and we can't take any risks to allow Huawei any breathing room into our 5G networks?

Perhaps it's because Trump finally realizes the financial damage that Huawei's Ban has caused the US. Maybe it's easier to throw off Huawei in theory rather than practice. Principles and profit don't always shake hands in political wars.


And perhaps this 13th round of trade talks is living proof.