Shipping containers. Photo: Avigator Thailand/Shutterstock.com

The Trump administration's aggressive trade policies, including escalating tariffs on China and a ban on Chinese telecom giant Huawei Technologies Co. Ltd., stirred up the international trade waters, leaving U.S. businesses searching for answers in the murkiness. 

But the sediment is settling and some major companies are beginning to push back against trade restrictions. 

So far this week, FedEx has announced it followed in Huawei's footsteps and sued the Commerce Department, and The New York Times reported that major U.S. semiconductor companies, including Intel Corp. and Micron Technology Inc., had resumed business with Huawei. 

FedEx and its attorneys at Baker McKenzie argue that trade restrictions under the Export Administration Regulations constitute a due process violation as they “unreasonably hold common carriers strictly liable for shipments that may violate the EAR without requiring evidence that the carriers had knowledge of any violations. 

“This puts an impossible burden on a common carrier such as FedEx to know the origin and technological make-up of contents of all the shipments it handles and whether they comply with the EAR,” FedEx added. 

The day after FedEx sued the federal government, the Times, citing anonymous sources, reported that U.S. chipmakers had resumed doing business with Huawei after having “found ways to avoid labeling goods as American-made” and were “selling millions of dollars of products to Huawei.”

Intel did not respond to a request for comment. Micron declined to discuss the report, but a company spokesman referenced a statement from Semiconductor Industry Association president and CEO John Neuffer, who said “it is now clear some items may be supplied to Huawei consistent with the Entity List and applicable regulations.”

Neuffer added, “Each company is impacted differently based on their specific products and supply chains, and each company must evaluate how best to conduct its business and remain in compliance.”

The companies in question started shipping certain tech products to Huawei based on an analysis of the list of items subject to EAR restrictions, said Kevin Wolf, a partner in the international trade and compliance practice at Akin Gump Strauss Hauer & Feld in Washington, D.C., and former Commerce Department official, in an interview Wednesday. 

“If you have a foreign-made item that does not contain more than 25% controlled content, then it's not subject to the regulations,” he said. “A lot of semiconductors are not U.S. origin and the law doesn't apply to foreign-made items that don't contain U.S. origin content.”

Wolf added the “companies that stopped [shipping products to Huawei] did the right thing because the penalties for getting this wrong are quite severe. It's very normal for companies to stop shipments and do their analysis of what is legal and what is not so they don't inadvertently make a mistake.”

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