President Donald Trump said over the weekend that U.S. companies can sell high tech equipment to Huawei, adding more confusion to an export ban that Trump first placed against Huawei in May. Trump said the ban was unfair to U.S. suppliers. However, he was unclear as to which U.S. firms could resume supplying Huawei and which specific products they could resume selling.
Following a meeting with Chinese premier Xi Jinping at the G20 summit this weekend, Trump said, “U.S. companies can sell their equipment to Huawei. We’re talking about equipment where there’s no great national security problem with it.”
Trump’s latest comment caused Huawei’s stock to jump this morning, along with the stocks of some Asian companies that supply the Chinese telecom vendor, reported Reuters.
Some American companies that supply Huawei also rallied this morning, including Intel, Qualcomm and Micron. In fact, these same companies had already reportedly found workarounds to comply with government export restrictions, and they had resumed shipments to the Chinese tech giant in June.
Speaking on an earnings call with investors last week, Micron CEO Sanjay Mehrotra said, “There is considerable ongoing uncertainty surrounding the Huawei situation.” Micron had resumed some shipments to Huawei after determining certain products were not subject to the government’s export restrictions.
Trump isn’t the only one waffling. For months, Huawei insisted that the U.S. ban wasn’t hurting its business. In its first earnings report this year the company reported a net profit of close to $9 billion in 2018, which was an increase of 25% compared to the previous year. Huawei said its revenue for the year increased by almost 20% to $105 billion, which was its fastest growth in two years. But, in June, Huawei CEO and founder Ren Zhengfei said his company had reduced its revenue forecast for 2019, and that Huawei's revenue would be down 30%, coming in at an estimated $100 billion. He estimated that Huawei would suffer some $30 billion in lost revenue over the next two years.