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The US bans Huawei license to stop crop purchase by China

by TheThus
August 12, 2019
in Technology
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The US bans Huawei license to stop crop purchase by China

Huawei suppliers Micron Technology Inc. and Western Digital Corp. declined (Image Source: Reuters)

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The White House has stayed the decision regarding the licensing of American companies to resume business with the Huawei Technologies company, according to people familiar with the matter.

Commerce Secretary Wilbur Ross, whose department has scrutinized applications to resume sales, said last week he had received 50 requests and pending a decision on them. Huawei requires an exclusive license to supply goods after US businesses included China’s telecommunications company in the trade blacklist in May over national security concerns.

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Huawei suppliers Micron Technology Inc. and Western Digital Corp. declined as much as 2.2% after news on license approval delays. Other electronics stocks that fell more than 1% in after-hours trading were Qualcomm Inc., Lumentum Holdings Inc, Xilinx Inc, Skyworks Solutions Inc, Finisar Corp and NeoPhotonics Corp, which lost more than 6%. The Australian dollar and the offshore yuan weakened compared to the green and the yen gained.

Trade truss: After President Donald Trump agreed to a trade cease-fire with Chinese President Xi Jinping in Japan in late June, some restrictions on Huawei would be relaxed. But the promise was contingent on China stepping up its purchases from American farmers, whom Trump complained the country had failed to do.

Tensions increased further last week as Trump said he would impose a 10% tariff on $ 300 billion of Chinese imports as of September 1, and his Treasury Department formally labeled China, a currency manipulator.

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Nevertheless, Trump said last week that he was not planning to reverse the decision made in Japan to allow Huawei to sell more by US suppliers of non-sensitive products. He said that the issue of Huawei is not related to trade talks.

The White House did not immediately comment, and the Commerce Department declined to comment.

Tech Pitch: Technology companies have already made their pitch to the White House for a fast grant of licenses that would allow them to resume some shipments of components to Huawei.

The Chinese company is one of the world’s largest buyers of semiconductors. Sustainable access to that market is critical to the fortunes of chipmakers such as Intel Corp, Qualcomm Inc., and Broadcom Inc., who sent their chief executives to meet with Trump in July.

Companies like Xilinx Inc. and Micron have publicly stated that they have applied for licenses and called on the US to allow them to resume doing business with Huawei. He argues that many of their products are readily obtainable from their foreign rivals, making a ban ineffective and even detrimental to the industry that is believed to be a facilitator in trade disputes with China.

Some US-based manufacturers of electronic devices have already reported earnings and forecasts to show harmful effects of trade disputes.

For the latest Breaking News and Top Stories follow The Thus on Facebook, Twitter, Instagram and Pinterest.

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TheThus

Prakash Gohel is the Founder & Chief Editor of ‘The Thus.’ He has a very deep interest in all current affairs topics whatsoever. Well, he is the power of our team, and he lives in Gujarat. Who loves to be a self-dependent person. As an author, He is trying his best to improve this platform day by day. His passion, dedication, and quick decision-making ability make him stand apart from others.

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