Mohacsy's Safe Portfolio Member Forum

[Elroy Jetson]

The Commerce Department’s Bureau of Industry and Security said Donald Trump added Huawei Technologies Co. Ltd. to its “Entity List” because Huawei “is engaged in activities that are contrary to U.S. national security or foreign policy interest.”

Huawei's listing on the "Entity List", takes effect in the coming days.

It prevents Qualcomm, Google or anyone from selling any US product or licensing any IP property to Huawei and its affiliates unless they first obtain a U.S. government license for that specific sale.

“This is a very, very big deal in terms of the entire relationship between China and the United States and ramping up this trade war,” said Doug Jacobson, a Washington attorney specializing in export law.

Huawei is a large telecommunications equipment maker which has significant backing from the Chinese military. The Justice Department has also accused it of violating Iran sanctions, among other things.

The move came right after Trump declared a “national emergency” and signed an executive order that expands the government’s powers to protect communications networks.

https://www.whitehouse.gov/presidential-actions/executive-order-securing-information-communications-technology-services-supply-chain/

Last year, Emperor Xi personally requested that Trump remove ZTE from the "Entity List". Trump said he would do it as a personal favor to Xi, and after several weeks of discussions, the U.S. government allowed the company to survive with new limitations. But Trump can change that as well.

Companies can escape the entity list if they satisfy the Bureau of Industry and Security that it has stopped the activities that ran afoul of the U.S. government. With the company’s chief financial officer facing possible extradition to the United States on charges of violating U.S. sanctions on Iran, the company will likely have to pay civil and criminal penalties before getting off the list.

Kevin Wolf, a former assistant secretary of commerce for export administration, said taken together, the two actions are a significant tightening of the vise.

“This is going after a Chinese state champion,” said Wolf, a partner at Akin Gump. “I suspect it will add greatly to the tensions.”