In what is seems largely as a reversal of its recent trade ban, President Trump has decided that China’s Huawei can once again purchase equipment from US suppliers. The decision was announced to reporters following the recent G20 summit in Japan, where Trump met with China’s President Xi Jinping to discuss the trade hostilities between the two countries.
The American government had added Huawei and 70 of its affiliates to an “entity list” which forbids U.S. companies from doing business with it. The consequences of this move were huge all over Huawei’s networking and consumer device businesses. Forcing few of the Chip companies to cut all of its ties. Whereas Google which provides its Android software for Huawei devices also terminate its relationship with the country.
Huawei founder and chief executive Ren Zhengfei said recently that the ban would cost the Chinese tech company some $30 billion. This lost revenue will take place over the next two years, hitting the world’s third largest seller of smartphones. To cool down the current situation, Trump and Xi Jinping President of China agreed to a truce between both nations. Previously, it was expected that negotiations were merely on a political basis. Instead, Mr. Trump granted Huawei some relief by allowing US-based companies to resume sales.
However, the reversal does come with a limitation. Trump told reporters in regards to the sales authorization “We’re talking about equipment. Where there’s no great national security problem with it”. The statement is in reference to the US government’s ongoing concern over Chinese telecom equipment. Following its alleged potential for facilitating espionage.
It’s unclear at this time which products US companies can sell to Huawei and which will be blocked. Under national security concerns. Existing import tariffs will not go away, Trump told reporters. But, he did agree to pause the trade war by avoiding new levies on additional Chinese goods.