A meeting was convened by the Trump administration on Monday where chief executive officers of seven technology firms were invited to discuss economic and national security issues.
President Donald Trump and his staff met with Micron’s Sanjay Mehrotra, Qualcomm’s Steven Mollenkopf, Western Digital’s Stephen Milligan, Google’s Sundar Pichai, Intel’s Robert Swan, Broadcom’s Hock Tan, and Cisco’s Chuck Robbins.
On top of the agenda was the export ban on Huawei and trade relationships with China. Since several American companies do business with Huawei, especially those that make chips, smartphones, and laptops, the restrictions are hurting their revenue. Moreover, these companies argue that the ban isn’t exactly doing anything for national security. In fact, President Trump has himself hinted that Huawei is merely a bargaining chip to make China cede to America’s trade terms.
The CEOs that attended the meeting requested the government for timely licensing decisions regarding the ban and the President agreed. When Huawei was first put on the entity list, various companies, including Google, severed business relations with the company. Later on, the government said that some restrictions will be lifted.
At the beginning of the month, the President eased his stance and announced during the G20 economic summit that U.S. companies can resume the sale of hardware and software to Huawei. However, the battered Chinese firm is still not allowed to carry out certain business activities and the U.S. government may strike again if it finds out that the company poses national security threats. Thus, a lot of uncertainty still surrounds the whole situation.
Micron and Intel, which both do significant business with Huawei, hailed the government’s decision. Other companies are yet to make a comment. The White House has said that the meeting was constructive.
Given that the trade ban was affecting the U.S. companies, some, including Micron and Intel resumed business with Huawei in June, before the G20 announcement. Huawei is Micron’s biggest client and the embargo caused the company to miss sales worth $200 million during the third quarter. The company apparently found a way to lawfully resume sales. Although Intel declined to comment, the Semiconductor Industry Association, which Intel is a part of, said at that time that the ban doesn’t affect some chips and thus they can be shipped to Huawei without violating the law.
In recent times, various tech companies have faced the wrath of the government, with the CEOs of some being summoned by the administration to explain their perceived shortcomings regarding issues such as privacy and abuse of monopoly power.
This could be one reason why the meeting was organized, allowing the government and the tech industry to bond on some common grounds. Other than the ban on Huawei, the government’s representatives, which included economic advisor Larry Kudlow, senior advisor to the President, Jared Kushner, and Commerce Secretary Wilbur Ross, and the tech executives also touched upon 5G.
At the end of the day, China is too large an economy to be ignored and blacklisting Huawei could very well backfire. First off, Huawei, which is currently the number two smartphone vendor in the world, buys a lot of its components from U.S. companies, adding to their revenue. Other than that, China has made its own entity list, and if the country retaliates, these businesses will lose their access to one of the largest markets in the world.