In July this year American President Donald Trump declared that some U.S. companies would be allowed to sell to China’s Huawei Technologies Co Ltd. According to Reuters, 130 companies have submitted applications to the U.S. Commerce Department and no licenses have been approved.
Huawei has played a central role in the ongoing trade tensions between America and China. It is the number one telecom supplier in the world, the second largest phone manufacturer, and is spearheading the 5G revolution. The United States has long distrusted the company, citing national security concerns.
The technology giant was added to the Commerce Department’s "Entity List" three months ago following an executive order from President Trump which more or less banned it from American communication networks.
Huawei’s founder, Ren Zhengfei had feared that this move would wipe out all of the company's top line growth for 2019 and cost it $30 billion. This figure has since been revised to $10 billion.
Last week, Trump threatened further tariffs on $550 billion in Chinese imports in retaliation to China’s imposition of new levies on $75 billion in the U.S.
William Reinsch, a former Commerce Department official observed “Nobody in the executive branch knows what (Trump) wants and they’re all afraid to make a decision without knowing that.”
Ren Zhengfei warned in an internal memo last week that Huawei is at a “live or die moment”, it appears that many American companies are eager to help it live.