The U.S. government on Monday temporarily eased some trade restrictions imposed last week on China’s Huawei, a move that sought to minimize disruption for the telecom company’s customers around the world.
The U.S. Commerce Department will allow Huawei Technologies to purchase American-made goods in order to maintain existing networks and provide software updates to existing Huawei handsets.
The company is still prohibited from buying American parts and components to manufacture new products without license approvals that likely will be denied.
The new authorization is intended to give telecommunications providers that rely on Huawei equipment time to make other arrangements, U.S. Secretary of Commerce Wilbur Ross said in a statement.
The authorization, which is in effect for 90 days, suggests changes to Huawei’s supply chain may have immediate, far-reaching and unintended consequences for its customers.
“The goal seems to be to prevent internet, computer and cell phone systems from crashing,” said Washington lawyer Kevin Wolf, a former Commerce Department official. “This is not a capitulation. This is housekeeping.”
Reuters reported Sunday that Alphabet’s Google suspended business with Huawei that requires the transfer of hardware, software and technical services except those publicly available via open source licensing, citing a source familiar with the matter.
Google did not immediately respond to a request for comment on the new authorization. The Wall Street Journal reported, however, that a person familiar with the matter said Google would be halting its plans to cut Huawei’s access.
Huawei, the world’s largest telecommunications equipment maker, declined to comment to CNBC.
The Commerce Department said it will evaluate whether to extend the exemptions beyond 90 days.
On Thursday, the U.S. Commerce Department added Huawei and 68 entities to an export blacklist that makes it nearly impossible for the Chinese company to purchase goods made in the United States.
The companies on the list are deemed to be engaged in activities contrary to the national security or foreign policy interests of the United States.
Reuters reported Friday that the department was considering a temporary easing, citing a government spokeswoman.
Monday’s announcement said the authorization was created as a temporary general license, in effect until Aug. 19.
The license also allows disclosures of security vulnerabilities and for Huawei to engage in the development of standards for future 5G networks.
BDST: 1212 HRS, MAY 21, 2019
RS
