WASHINGTON – Trump administration plans to issue licenses soon allowing some US companies to deliver nonsensitive goods to Chinese telecom giant Huawei, according to people familiar with the matter, a move that could cool U.S.-China tensions as trade negotiations resume this week.
At a meeting last week, President Trump gave the green light to begin approving the licenses, which will allow some select US companies to bypass a ban his administration placed on Huawei this year.
May placed the Trump administration Huawei and dozens of its affiliates on the entity list, citing national security concerns. This move blocked Huawei from buying parts and obtaining technology updates from companies such as Google and Micron without seeking approval from the US government.
The Trump administration originally said it would approve licenses to continue selling to Huawei after Trump met with China's Xi Jinping in Osaka, Japan, in June. But no licenses have been issued since, prompting speculation that the administration was holding them back from influencing trade talks.
A Department of Commerce spokesperson responsible for the licenses said in an email that "as at this very moment, the status quo holds."
The administration's decision to allow licenses can help smooth the way US and China dealers meet in Washington this week for their 13th round of trade talks, and officials are trying to agree on terms that will address Trump's criticism of China's economic practices, but which may still be acceptable to Beijing.  Mr Trump has threatened to raise tariffs on Chinese goods worth $ 250 billion this month and impose a new tariff in December if Beijing does not agree to concessions Washington has demanded, but some in the Trump administration has been eager to avoid further tariff increases and is pushing for a more limited deal, which would end a trade war that has continued for more than a year.  It is not clear whether the President would consent to a limited pact or whether such an agreement could be made. China has continued to resist many of the administration's demands to make more transformative changes in the way it runs its economy. The two countries have entered into an agreement before only to have the scheme fall apart.
Approval of licenses that allow US companies to deliver so-called general goods to Huawei is likely to be viewed as a gesture of goodwill, although its practical effects may be limited. Despite the ban, many US companies continue to deliver goods to Huawei by finding ways to avoid labeling goods that are American-made and channeling multiple products manufactured outside the United States to the company.
In a June interview, US CEO of Micron chip maker Sanjay Mehrotra said the company had briefly halted shipments to Huawei but then resumed sales after Micron reviewed device list rules and "determined that we could legally resume" shipping by a subset of products.