Huawei and US tech companies continue business as usual through technical loophole

Despite the ongoing trade war between China the United States, some tech companies plan to continue to do business as usual. According to a recent report from the New York Times citing people familiar with the situation, chipmakers such as Micron, Intel and Qualcomm plan to continue to do business with China-based Huawei, which has gotten the ire of the US government and defense departments as of late, by exploiting a labeling loophole.

By removing the label of “American-made” goods from products built and produced overseas, many companies caught in between this bout of international and economic tug-of-war will now be free to commence trade to a certain degree. With a more extensive sales ban expected to be levied at Huawei in August of 2019, the obvious loophole could be sealed, but even by the Trump administration’s own admittance, companies relabeling products are within their lawful right to continue to do business with the Chinese company.

The CEO of Micron, Sanjay Mehrotra, hasn’t publically spoken about the company’s business sleight of hand, but during an earnings call earlier this year, he acknowledged the chipmaker had paused shipments to Huawei in accordance to Commerce Departments Entity List. However, the reality is that Micron and other chipmakers resumed shipments to Huawei soon after reviewing the explicit rules of the Entity List.

With what seems to be a relatively easy workaround for US-based companies to continue to do business with some entities in China and Huawei in specific, it seems Microsoft’s silence on the matter may be more self-preservation than indifference. Perhaps, not wanting to call attention to legal loopholes, Microsoft has opted to remain silent until absolutely necessary. Whatever the reason, the US-based software giant has remained tight-lipped on its business position with Huawei and we don’t expect any changes any time soon.

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