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Home / Business / American Technical Companies Sets a Trump Ban to Continue to Sell to Huawei

American Technical Companies Sets a Trump Ban to Continue to Sell to Huawei

SHANGHAI – A number of America's largest chip makers have sold millions of products to Huawei despite the fact that Trump managed to ban US technology sales to the Chinese telecommunications giant, according to four sales people.

Since the trading department adopted the ban in May, US companies, including Intel and Micron, have found ways to sell technology to Huawei, the people said, who spoke on condition they were not named because they were not authorized to disclose sales.

The components began to flow to Huawei about three weeks ago, the people said. Goods produced by US companies abroad are not always considered as the US team, and the suppliers use this. Sales will help Huawei continue to sell products like smartphones and servers.

The deals emphasize how difficult it is for the Trump administration to squeeze on companies it considers a national security threat like Huawei. They also hint at possible unintended consequences of changing the network of trade relations that connect the world's electronics industry and global trade.

The Ministry of Commerce's move to block sales to Huawei by putting it on a so-called entity list, putting confusion in the Chinese company and its many US suppliers, the people said. Many executives lacked deep experience with American Trade Controls, which led to original suspensions in shipments to Huawei until lawyers could figure out which products could be shipped. Decisions about what can and cannot be sent were also often run by the Commerce Department.

US companies can sell technology that supports current Huawei products until mid-August. But a ban on components for future Huawei products is already in place. It is not clear what percentage of today's sales for future products. Sales have most likely already been hundreds of millions of dollars, the people estimated.

While the Trump administration has been aware of the sale, officials are divided on how to respond, the people said. Some officials feel that the sale breaks the spirit of the law and undermines the government's efforts to push Huawei, while others are more supportive because it eases the ban on US companies. Huawei has said it buys about $ 11 billion in technology from US companies every year.

Intel and Micron refused to comment.

"As we have discussed with the US government, it is now clear that some items can be delivered to Huawei's compliance with the entity list and applicable regulations," wrote John Neuffer, president of the Semiconductor Industry Association, in a statement by

. on Friday

"Each company is affected differently by their specific products and supply chains, and each company must consider how it is best to operate and adhere to. "

In a revenue call on Tuesday afternoon, Micron's CEO Sanjay Mehrotra said the company stopped sending to Huawei after the Commerce Department's action last year, but it resumed the sale two weeks ago after Micron had reviewed the business list rule list and" determined that we could legally resume shipping a subset of products, Mr. Mehrotra said. "However, there is considerable ongoing uncertainty about the Huawei situation," he added.

The Department of Commerce did not immediately respond to requests for comment. Chinese jewel of innovation and technological excellence, has become a symbol of the economic and security distance between the United States and China, the Trump administration has warned that Chinese companies such as Huawei, which make telecommunications networking equipment, could capture or keep information to China. denied these charges.

President Xi Jinping in China and President Trump is expected to have an "expanded" talk this week during 20 meetings in Japan, a sign that the two countries are again seeking a compromise after trade discussions broke down in May. The Trump administration announced new restrictions on Chinese technology businesses.

While the Trump administration has pointed to security and legal concerns to justify their actions, some analysts are concerned that Huawei and other Chinese technology companies were banks in the trade negotiations. Along with Huawei, the administration blocked a Chinese supercomputer maker from buying US technology, and is considering adding the monitoring technology company Hikvision to the list.

Kevin Wolf, a former trade department official and partner of the law firm Akin Gump, has advised several US technology companies that provide Huawei. He said he told executives that Huawei's addition to the list did not prevent US vendors from continuing to sell, as long as the goods and services were not made in the United States.

For example, a chip can still be delivered to Huawei if it is manufactured outside the US and does not contain technology that could pose a national security risk. But there are limits to sales from US companies. For example, if the chip maker provides US services for troubleshooting or instructions on how to use the product, the company will not be able to sell to Huawei, even if the physical chip was made overseas, Mr. Wolf said. [19659002] "This is not a loophole or an interpretation because there is no ambiguity," he said. "It's just esoteric."

In some cases, US companies are not the only source of important technology, but they will avoid losing Huawei's valuable business to a foreign rival. For example, Idaho-based Micron competes with South Korean companies such as Samsung and SK Hynix to deliver memory chips that go into Huawei's smartphones. If Micron is unable to sell to Huawei, orders can easily be moved to the rivals.

Beijing has also pushed US companies. This month, the Chinese government said it would create a " unreliable device list" to punish businesses and individuals who are perceived as harmful Chinese interests. The following week, China's leading financial planning agency called on foreign leaders, including representatives from Microsoft, Dell and Apple. It warned them that cutting sales to Chinese companies could lead to penalties and suggested companies should lobby the US government to stop the bans. The effort is high for some of the American companies, like Apple, who rely on China for many sales and too much of production.

Mr. Wolf said several companies had encrypted to find out how to continue selling to Huawei, with some companies considering a total change of production and services for some products overseas. The growing trade dispute between the United States and China is "causing companies to fundamentally consider their supply chains," he added.

That could mean that US companies are shifting their knowledge, at the peak of production, outside the United States, where it would be less easy for the government to control, said Martin Chorzempa, a researcher at the Peterson Institute for International Economics.

"US companies can move some things out of China if it is problematic for the supply chain, but they can also move technological development out of the US if it becomes problematic," he said. "And China is still a big market."

"Some of the big winners may be other countries," Chorzempa said.

Some US companies have complained that it is difficult or impossible to comply with the tight restrictions FedEx filed a lawsuit against the federal government, claiming that the rules of the Trade Department constituted an "impossible burden" on a company such as FedEx to know the origin and technological makeup of all shipments. it handles.

FedEx complaint did not specifically mention Huawei. But it said the agency's rules that have banned exporting US technology to Chinese companies put "an unreasonable burden on FedEx to polish the millions of shipments undergoing our network every day."

"FedEx is a transport company, not a law enforcement agency, the company said.

A Trade Department spokesman said it had not yet reviewed FedEx's complaint, but would defend the agency's role in protecting national security.

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