How a rule, allowing US companies to apply for exemptions from the Huawei ban, was created when the Obama administration was contemplating sanctions against ZTE
Reed Albergotti / Washington Post :
Context & Ripple Effects
The license-exemption valve now shaping the Huawei fight is older than the Huawei fight itself. As the Washington Post reports, it was drafted when the Obama administration was weighing sanctions against ZTE — the same confrontation behind Commerce's three-month reprieve on ZTE export restrictions in 2016, granted after allegations of sanctions-breaking sales to Iran.
ZTE then became the cautionary tale: when a full cutoff forced it to halt operations, Trump ordered Commerce to find a way to help, and the ban was formally lifted weeks later. That episode taught both sides what a total severing looks like — and when Huawei landed under restrictions in 2019, the Obama-era exemption mechanism was already sitting there as the pressure-release design.
First-order effects
- US suppliers, above all the semiconductor industry, gain a formal application path to keep selling to Huawei rather than facing the binary cutoff that nearly killed ZTE — turning each restricted sale into a licensing decision instead of a lost customer.
Second-order effects
- The carve-out invites organized lobbying: Bloomberg's reporting on the chip industry's campaign before Trump eased some Huawei restrictions shows suppliers working the exemption channel, while interagency friction — DOD and Treasury objections preceded the withdrawal of rules that would have tightened overseas sales to Huawei — leaves enforcement contested inside the administration itself.
Third-order effects
- A controls regime with routine exemptions gives Huawei time and partial supply to localize: teardowns show China-made content in its flagship phones climbing from 32% in similarly priced 2023 models to 57% in the Mate 70 Pro and Pura 80 Pro, and the company is rebuilding its chip business seven years after being cut off from advanced US chips — meaning each approved license trades short-term supplier revenue against accelerating substitution.
The trend: US export controls are hardening into a managed regime of bans plus built-in exemptions, where lobbying and interagency bargaining — not the blacklist itself — decide which sales go through.