Huawei faces crisis as US yet to offer licenses on 130 applications

The U.S. Commerce Department has received more than 130 applications from technology companies for licenses to sell U.S. goods to China’s Huawei Technologies, Reuters reported.Huawei smartphone retail shop

The Donald Trump administration has not yet granted any licenses for sales to the blacklisted company. Huawei’s suppliers have received an additional 90-day permission to sell products to Huawei last week.

This means that Huawei, the world’s top producer of telecoms network and the second largest maker of smartphones, is unable to source components or services from US-based companies such as Qualcomm, Intel, Micron, among others.

Huawei last week said its revenue will be hit due to the sanctions and smartphone revenue will be lower by $10 billion in 2019. US technology companies will also be facing the heat in the wake of their inability to supply components to Huawei.

Last week, Donald Trump agreed to raise tariffs on $550 billion in Chinese imports, hours after China imposed levies on $75 billion in U.S. goods. Donald Trump, at the G7 leaders’ meeting over the weekend, said he thought the world’s two largest economies would reach a deal to end the trade war.

U.S. Commerce Secretary Wilbur Ross disclosed receiving in July that the current number of license applications far exceeds 50.

A spokesman for the Commerce Department said: “The interagency process, weighing license requests concerning Huawei and its non-U.S. affiliates, is currently ongoing.”

The United States has placed Huawei on the black list because of U.S. national security concerns. The US blocked sales of U.S. technology goods to Huawei companies on the list, unless suppliers receive special licenses after tough scrutiny.

The United States says the Chinese technology company can spy on customers and has sought to convince allies to exclude it from 5G networks. The US has never tried to show its proof on the spying allegation. Huawei denies the allegations.

In late June, Donald Trump promised President Xi Jinping that U.S. companies would be allowed to make some sales to Huawei. Huawei spent $11 billion on U.S. components from U.S. firms such as Intel, Qualcomm and Micron Technology last year.

Government officials urged U.S. companies to apply for licenses following Trump’s pledge of relief, saying exports to Huawei of non-sensitive items that are readily replaced by foreign competitors would be permitted.