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Fred Dufour

The Trump administration announced Wednesday that it has begun issuing licenses allowing some companies to restart U.S. tech sales to China’s Huawei, months after adding the telecom company to a <a href="https://www.washingtonpost.com/world/national-security/trump-signs-order-to-protect-us-networks-from-foreign-espionage-a-move-that-appears-to-target-china/2019/05/15/d982ec50-7727-11e9-bd25-c989555e7766_story.html" target=_blank>trade blacklist</a>.

The licenses, which will benefit both U.S. tech companies and Huawei, come as the United States struggles to secure a wider <a href="https://www.washingtonpost.com/business/economy/in-latest-china-pivot-trump-says-partial-trade-deal-might-not-be-completed-this-year/2019/11/08/b3d65bd4-024d-11ea-9518-1e76abc088b6_story.html" target=_blank>trade deal</a> with China.

The Commerce Department approved roughly one-quarter of the nearly 300 license applications it received from companies, according to an industry official who spoke on the condition of anonymity to discuss nonpublic information. One-quarter of applications are receiving denial notifications and no action has been taken on the rest, the official said.

The Commerce Department declined to comment Wednesday on the number of applications approved. In an emailed statement, the agency said it was authorizing only “limited and specific activities which do not pose a significant risk to the national security or foreign policy interests of the United States.”

It said it is notifying some companies that it intends to deny their license applications. Those companies will have 20 days to appeal before the denial is official.

The denial notifications involve firms that build communication network equipment, whether 5G, radio or other components, the industry official said. The licenses that were approved related to consumer products that were deemed noncontroversial and to have no potential security threat.

Semiconductor companies, which manufacture the silicon chips that are critical to electronic devices, are among the license recipients, according to the Semiconductor Industry Association, which said it couldn’t name individual recipients.

Many U.S. companies have reported losing significant sales from the trade ban on Huawei, which said it spent $11 billion on U.S. tech in 2018, before the ban. Among the companies reporting a sales hit in recent quarters were semiconductor makers Micron Technology of Boise, Idaho; Skyworks Solutions of Woburn, Mass.; and Qorvo of Greensboro, N.C.

The Commerce Department said the granting of some licenses did not change Huawei’s inclusion on the department’s “<a href="https://www.washingtonpost.com/technology/2019/05/20/google-cuts-off-huawei-after-trump-administration-crackdown/" target="_blank">Entity List</a>” of companies considered national security risks, and that the granting of some licenses did not change a temporary <a href="https://www.washingtonpost.com/business/2019/11/18/trump-administration-extends-reprieve-allowing-limited-tech-exports-huawei/" target="_blank">90-day reprieve</a> that the Commerce Department issued this week intended primarily to benefit <a href="https://www.washingtonpost.com/business/2019/10/10/huawei-helped-bring-internet-small-town-america-now-its-equipment-has-go/" target="_blank">rural telecoms</a> dependent on Huawei equipment.

It wasn’t immediately clear whether the license approvals indicated any change in the Trump administration’s wider <a href="https://www.washingtonpost.com/business/economy/in-latest-china-pivot-trump-says-partial-trade-deal-might-not-be-completed-this-year/2019/11/08/b3d65bd4-024d-11ea-9518-1e76abc088b6_story.html" target="_blank">trade negotiations</a> with China. The United States blacklisted Huawei in May after calling it a security threat, saying the Chinese government could tap into Huawei telecom network gear installed abroad <a href="https://www.washingtonpost.com/world/national-security/us-officials-planning-for-a-future-in-which-huawei-has-a-major-share-of-5g-global-networks/2019/04/01/2bb60446-523c-11e9-a3f7-78b7525a8d5f_story.html" target="_blank">to spy</a> on the West or disrupt infrastructure. But President Trump has also <a href="https://www.washingtonpost.com/business/economy/trump-calls-huawei-dangerous-but-says-dispute-could-be-resolved-in-trade-deal/2019/05/23/ed75c4a0-7da6-11e9-8ede-f4abf521ef17_story.html" target="_blank">suggested</a> he could ease up on Huawei as part of a larger trade deal.

China has said relief for Huawei is essential if Beijing is to agree to any trade deal.

The U.S. tech industry has <a href="https://www.washingtonpost.com/business/2019/07/19/us-tech-companies-push-trump-allow-some-sales-huawei/" target="_blank">lobbied hard</a> for the chance to restart some sales, arguing it should be allowed to supply Huawei with parts for consumer technology products that don’t hurt U.S. national security, such as smartphones and laptops. The Chinese company is one of the world’s <a href="https://www.washingtonpost.com/business/2019/06/23/huawei-digs-long-battle-with-us/" target="_blank">largest manufacturers</a> of telecom network gear and smartphones.

Intel chief executive Bob Swan told <a href="https://www.cnbc.com/2019/08/01/intel-says-it-has-applied-for-licenses-to-sell-to-blacklisted-huawei.html" target=_blank>CNBC</a> in July that the company had submitted “quite a few” license applications to sell products including general-purpose computing chips, which he said shouldn’t be “worrisome” for national security. Intel declined to comment Wednesday on whether it had received any licenses.

“We welcome the administration’s approval of export licenses for commercial semiconductor technologies that do not pose national security concerns,” the Semiconductor Industry Association said in an emailed statement.

“Sales of these non-sensitive commercial products help ensure the competitiveness of the U.S. semiconductor industry, which is essential to national security,” the group said. “We hope license approvals continue to proceed in an appropriate and timely manner.”

In an <a href="https://video.foxbusiness.com/v/6106343114001/#sp=show-clips" target=_blank>interview</a> on Fox Business Network on Tuesday, Commerce Secretary Wilbur Ross said there had been “290-something requests” for licenses to sell tech to Huawei.

He also defended the 90-day reprieve, the third one the administration has granted since the May ban was imposed. The reprieve will allow a limited number of transactions with Huawei to continue, largely to help rural U.S. telecom companies maintain networks that use Huawei equipment, Ross said.

“You can’t cut the local people in the rural communities out of telephones,” he said.

Adding Huawei to the trade blacklist was part of a broad U.S. push against the Chinese company, which the United States also accuses of <a href="https://www.washingtonpost.com/world/national-security/justice-dept-charges-huawei-with-fraud-ratcheting-up-us-china-tensions/2019/01/28/70a7f550-2320-11e9-81fd-b7b05d5bed90_story.html" target="_blank">violating</a> U.S. sanctions on Iran.

The Trump administration has banned federal agencies from buying Huawei gear and <a href="https://www.washingtonpost.com/technology/2019/03/06/us-allies-are-skeptical-trump-administrations-huawei-argument/?utm_term=.16c96248676a&tid=lk_inline_manual_24">pressured allies</a> to exclude Huawei equipment from their 5G wireless networks, with mixed results.

“The Commerce decision on licenses for Huawei isn’t a surprise and reflects a compromise solution between the business and national security communities,” said Eric Sayers, a vice president at Beacon Global Strategies, a consulting firm. “Neither will be entirely happy, but it’s a temporary middle ground for now that puts limitations on Huawei’s 5G business while allowing U.S. companies to continue to sell to Huawei’s non-5G business lines.”

The “real question,” he said, is whether the United States can persuade Japan, Taiwan and South Korea also to restrict their sales of components that enable Huawei’s 5G network buildout.

The Senate and the House are currently negotiating the final text of the annual National Defense Authorization Act, which will “at the very least keep Huawei on the entity list,” he said, “but could also go further by giving Congress the ability to override decisions on specific licenses for sales to Huawei in the future.”

On Friday, the Federal Communications Commission is expected to vote on <a href="https://www.washingtonpost.com/news/the-switch/wp/2018/03/27/the-fcc-wants-to-slap-restrictions-on-chinese-made-wireless-gear/?tid=lk_inline_manual_8&tid=lk_inline_manual_14">a proposal</a> to block U.S. telecom and Internet companies from receiving federal subsidies if they buy foreign equipment from companies deemed to pose a security threat, including Huawei and fellow Chinese equipment maker ZTE. Rural telecom companies rely on these subsidies to make ends meet.

The FCC will also discuss a new proposal to require subsidy recipients to remove any existing Huawei or ZTE equipment from their networks.

Finalist for a 2016 Pulitzer Prize as part of a WSJ team

National Institute for Health Care Management print award, 2017

Association of Health Care Journalists first-place award, 2015

Newswomen's Club of New York award, 2017

Cornell University, BA in English

Jeanne Whalen is a reporter covering business around the world. She previously reported for the Wall Street Journal from New York, London and Moscow. 

Jeanne Whalen

Georgetown University, MS in Foreign Service

University of Wisconsin - Madison, BA in English

Joe Marks writes The Cybersecurity 202 newsletter focused on the policy and politics of cybersecurity. He previously covered cybersecurity for Politico and for Nextgov. 

Joseph Marks

Pulitzer Prize for Public Service, 2014

Gerald Loeb Award 2014, NSA stories

Society of American Business Editors and Writers enterprise award 2009, for the story "Banking Regulator Played Advocate over Enforcer"

Daily Californian Alumni Association Alumna of the Year, 2017

Pulitzer Prize for reporting on Russian interference in the 2016 presidential election, 2018

Pulitzer Prize for Public Service in 2022 for an investigation of the Jan. 6 assault on the U.S. Capitol

The Prince of Tennessee

City University, London, MA in international journalism

University of California at Berkeley, BA in humanities

Ellen Nakashima is a national security reporter with The Washington Post. She was a member of three Pulitzer Prize-winning teams, in 2022 for an investigation of the Jan. 6 assault on the U.S. Capitol, in 2018 for coverage of Russia's interference in the 2016 election, and in 2014 and for reporting on the hidden scope of government surveillance. 

