Revenue declined 23 percent in Micron Technology’s fiscal 2019 ended Aug. 29, but senior executives on a fiscal Q4 call Thursday wouldn’t break out how much of the decrease was attributable to the disruption in shipments to Huawei. Revenue in Q4 was down 42 percent from a year earlier, but up 2 percent sequentially, exceeding Micron’s previous guidance on better-than-expected demand in the quarter, said the company. “In recent months, we have seen increased demand from customers headquartered in mainland China,” said CEO Sanjay Mehrotra. Some customers “could be making strategic decisions to build higher levels of inventory in the face of increased trade tensions between the U.S. and China,” he said. The components Micron sells have heavy exposure in the first three rounds of Section 301 tariffs on Chinese goods. President Donald Trump announced in August he would hike those tariffs in October (see 1908230006). Micron, “with continued mitigation,” was able to limit the tariffs’ impact on Q4's consolidated gross margin to fewer than 20 basis points, said Chief Financial Officer David Zinsner. Micron resumed shipping “some products” to Huawei in Q3 that were “not subject” to the Trump administration’s export restrictions, said Mehrotra. Sales to Huawei in Q4 declined sequentially and “were down meaningfully from the levels we anticipated” before the Commerce Department put Huawei on the entity list, he said. Micron applied to Commerce for licenses “that would allow us to ship additional products, but there have been no decisions on licenses to date,” he said. “If the entity list restrictions against Huawei continue and we are unable to get licenses, we could see a worsening decline in our sales to Huawei over the coming quarters.” The stock plunged 11 percent Friday to $43.21.

Rationales for opposing the President Donald Trump’s plan to increase Section 301 duties on Chinese goods to 30 percent “have only strengthened with the passage of time since the imposition of the original tariffs on Lists 1, 2, and 3,” commented CTA in docket USTR-2019-0015. Since July 2018, “these tariffs have cost the consumer technology industry and its consumers -- not China -- more than $10 billion,” it said. That includes more than $1 billion in tariff payments “on 5G-related products, it said. For Q4, the industry “expects to pay an additional $7 billion to account for tariffs on new products,” said CTA. Tariffs create “a negative chain reaction” for the consumer tech industry, commented the Information Technology Industry Council. The administration claimed it acted “to avoid placing tariffs on consumer products” when it imposed the first three rounds of 25 percent duties, but “there is simply no way to protect consumers from tariffs on $200 billion worth of goods,” said ITI. Hiking the duty rates to 30 percent “would only cause additional harm to U.S. consumers, cost U.S. jobs, and undermine U.S. technology companies in the fight for global leadership,” said ITI. “The proposed increase of tariffs on products from Lists 1-3 specifically affects” a wide variety of consumer products, including smart appliances and virtual-reality headsets, it said. Raising tariffs “will have broad implications, as all telecommunications equipment relies on gateways, modems, optical transceivers and routers,” it said.

DOJ and European Commission officials began formal negotiations Wednesday on an E.U.-U.S. agreement to “facilitate access to electronic evidence in criminal investigations,” the department announced Thursday. The sides will review progress at the E.U.-U.S. Justice and Home Affairs Ministerial in December. “This type of agreement can enhance public safety and national security by providing an improved and more rapid ability to identify and respond to criminal threats on both sides of the Atlantic,” Attorney General William Barr said, citing assurances to respect the rule of law, privacy and civil liberties. Negotiations “will strengthen our security, while protecting the data privacy and procedural safeguards of our citizens,” said European Commissioner for Justice Vera Jourova.

Strand Consult estimates the cost of swapping all the Huawei and ZTE equipment purchased since 2016 and installed in European markets at $3.5 billion. That's much less than the $60 billion estimate reported by some, said its report, set for release Sunday. “The claim that Huawei is needed to create competition cannot be supported by the fact that the company increasingly has a monopoly position and it uses anti-competitive practices.” Removing the equipment would make the networks more secure, Strand concludes: "If there were no security risk to doing business with China, then NATO would buy Chinese fighter planes. There are categories of products and services whose supply is restricted for justifiable security reasons, and national security has long been a part of telecom policy and regulation. National security has long been a part of telecom policy and regulation.” The companies didn't comment Friday.

A reversal of the 9th U.S. Circuit Court of Appeals decision in a fight over insurance coverage of a TV production would mean ignoring the undisputed meaning of the "warlike action" exclusion in insurance, giving Hamas legitimacy of a sovereign or blaming Israel for provoking Hamas, plaintiff-appellant Comcast's Universal Cable Production, said Wednesday. In its opposition (in Pacer, docket 17-56672) to defendant-respondent Atlantic Specialty Insurance's petition for panel rehearing and rehearing en banc (see 1908260060), Comcast said Atlantic never rebutted the argument that the "warlike action" exclusion doesn't encompass terrorist actions by terrorist organizations. Atlantic seeks rehearing of a 9th Circuit ruling that reversed and remanded a U.S. District Court's summary judgment decision in the insurer's favor.

BCE expanded reciprocal roaming with AT&T to give Canadian business customers access to AT&T's U.S. LTE-M network. “LTE-M supports low-power IoT applications with enhanced coverage, longer battery life and lower costs for IoT devices connecting to Bell's national network,” BCE said Thursday: “Bell LTE-M supports a broad range of large-scale IoT innovations, including asset tracking, fleet management, smart sensors, smart city applications.”

The International Chamber of Commerce urged the World Trade Organization to permanently ban tariffs on “cross-border data flows,” as a temporary ban soon expires. A 1998 moratorium should be made permanent to continue digital trade growth and prevent “trade barriers and burdensome customs duties,” ICC said Tuesday. Since the moratorium, “consumers have gained unprecedented access to new products and services” and international businesses accessed new markets. Three countries suggested ending the moratorium, including Indonesia, “going so far as to create tariff codes for ‘software and other digital goods transmitted electronically,” the business lobby said.

S&P Global Ratings is “fairly confident” that tech manufacturers Flex and Jabil “could manage their metrics to preserve” their current BBB-minus credit ratings if the fourth tranche of U.S. tariffs stays at 15 percent. At 30 percent, as the first three tariff rounds are scheduled to rise to on Oct. 15, potential EBITDA declines “could prove to be too severe” for either company to avoid a downgrade, said S&P Friday. It estimates goods generating 6-9 percent of Flex's revenue and 12-17 percent of Jabil's sales will have exposure to the four rounds. Jabil’s largest customer, Apple, draws 37 percent of its revenue from U.S. sales, it said. For Flex, the largest customer is Ford, which gets 61 percent of revenue from the U.S., it said. In fiscal 2019 ending March 31, 25 percent of Flex revenue came from manufacturing operations in China, the ratings firm said. It estimates Jabil derives 40-50 percent of revenue from Chinese production. The companies didn’t comment Monday.

Cybersecurity company Cloudflare submitted “incorrect information” on hardware exports to the Commerce Department and received payments from people and entities on a sanctions list of foreigners, it told the SEC this month. It voluntarily disclosed possible violations to the Bureau of Industry and Security and Office of Foreign Assets Control this year. It took “remedial measures” to prevent future violations, and agencies are reviewing the potential violations, the company said. The firm said it sells products to “certain OFAC-sanctioned regions” through the use of general licenses. The company didn't comment further Friday. The SEC filing involved an initial public offering, which the agency acted on Thursday, the firm said then. In the first day of trading in U.S. markets under the NET ticker Friday, shares closed up 20 percent at $18.

The U.S. shouldn’t make Huawei part of trade negotiations with China, former Homeland Security Secretary Tom Ridge told Yahoo Finance: “National security and Huawei being embedded in your network, that is a non-negotiable item.” Chinese Foreign Ministry spokesperson Hua Chunying, meanwhile, slammed Australia for keeping Chinese companies out of the 5G supply chain. “Under the pretext of national security, Australia was the first country to ban Chinese companies from its 5G network roll-out without any evidence of risks. It is blatant discrimination against Chinese companies,” Hua said, according to a transcript: “Australia has also been lecturing other countries about the 5G network and encouraging them to follow suit. Such disgraceful and immoral conduct is against basic market principles and international rules.”