The Commerce Department has received more than 200 Huawei-related license requests since the Chinese technology company was added to the agency’s Entity List, a Commerce spokesperson said. The agency is still reviewing the applications. “Given the complexity of the matter, the interagency process is ongoing to ensure we correctly identified which licenses were safe to approve,” the spokesperson said.
The U.S. and China appear poised to reach some sort of "mini-deal" before the end of the year, said Bank of America global economists Ethan Harris and Aditya Bhave in an Oct. 18 report. "In our view, both sides see the other as being in a weakened negotiating position," the analysts said. "The US can point to the bigger economic slowdown in China than in the US. China can point to President [Donald] Trump’s impeachment investigation and his desire to maintain a healthy economy going into the election. This argues for a relatively balanced 'win-win' deal."
It is “impossible” for U.S. exporters to fully comply with Commerce Department restrictions on transfers within China because Chinese courts do not enforce the restrictions, according to an Oct. 13 post by Harris Bricken.
Export Compliance Daily is providing readers with some of the top stories for Oct. 7-11 in case they were missed.
The Trump administration plans to soon issue export licenses to allow a “select few” U.S. companies to supply nonsensitive goods to Huawei, an Oct. 9 report in The New York Times said. Trump approved the step in a meeting last week, the report said, a little more than a month after the Commerce Department renewed the temporary general license for Huawei until Nov. 18 (see 1908190039).
The Commerce Department’s Oct. 9 blacklisting of several Chinese technology companies may not impact trade negotiations this week but could lead to significant retaliation against U.S. companies, trade experts said. And while the Trump administration insisted the Entity List decisions were unrelated to trade talks with China, the move unnerved U.S. companies impacted by the trade war that fear Commerce’s announcement could expedite the release of China’s so-called "unreliable entity list."
Chinese technology companies and the country’s foreign ministry criticized the U.S.’s decision to add 28 Chinese entities to the Commerce Department’s Entity List, a move that could lead to countermeasures, China said. China denied the allegations in Commerce’s announcement that it was involved in human rights violations of the country's Uighur population and urged the U.S. to “immediately” withdraw the Entity List additions, which it called “serious violation[s]” of international norms. “China will continue to take firm and powerful measures to resolutely safeguard national sovereignty, security and development interests,” a foreign ministry spokesperson said during an Oct. 8 press conference, according to an unofficial translation of a transcript.
The Commerce Department's Bureau of Industry and Security added 28 entities to its Entity List for their involvement in human rights violations of China’s Uighur population, BIS said Oct. 7. The entities include Xinjiang Uighur Autonomous Region People’s Government Public Security Bureau, 18 of its subsidiaries and eight China-based technology and science companies, including Hikvision, a major supplier of video surveillance products. The announcement takes effect Oct. 9.
The next few months include a "rapid-fire succession of trade and tech war deadlines" that poses a high level of uncertainty for the fight between the U.S. and China, Bank of America economists Ethan Harris and Alexander Lin said in a Sept. 30 research report. Of those deadlines, what happens with Huawei's temporary general license is likely the most important unknown, they said. Huawei on Nov. 17 will be cut off from all U.S. exports, but "we expect an 'extend and pretend' scenario where Huawei remains on the 'entity list' but is allowed to keep buying US inputs."
Revenue declined 23 percent in Micron Technology’s fiscal year 2019 ended Aug. 29, but senior executives on a fiscal Q4 call Sept. 26 wouldn’t break out how much of the decrease was attributable to the disruption in shipments to Huawei. Revenue in Q4 was down 42 percent from a year earlier, but up 2 percent sequentially, exceeding Micron’s previous guidance on better-than-expected demand in the quarter, the company said. “In recent months, we have seen increased demand from customers headquartered in mainland China,” CEO Sanjay Mehrotra said. Some customers “could be making strategic decisions to build higher levels of inventory in the face of increased trade tensions between the U.S. and China,” he said. The components Micron sells have heavy exposure in the first three rounds of Section 301 tariffs on Chinese goods. President Donald Trump announced in August he would hike those tariffs Oct. 1.