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The United States can reduce Huawei trade restrictions to help existing customers.



© Reuters. Photo: A woman walks past the Huawei shop in Beijing and sees a call.

Karen Freifeld

The US Department of Commerce said on Friday that this week's blacklist will soon reduce regulations on Huawei technology, as it would have made it nearly impossible for Chinese companies to serve existing customers.

"We are considering issuing a temporary general license to stop the operation of the existing network and stop the equipment," said the Commerce Department, which effectively halted Huawei's ability to purchase US parts and components.

Potential beneficiaries of licenses may include Internet access and mobile phone service providers in densely populated areas such as Wyoming and Eastern Oregon where network equipment has been purchased at Huawei in recent years.

Indeed, the Department of Commerce allows Huawei to purchase US products to help existing customers maintain their network and equipment reliability, but Chinese companies are still unable to purchase US parts and components to produce new products.

Potential rule rollback suggests that changes to Huawei's supply chain may result in immediate, broad, and unintended consequences.

The blacklist, which is officially known to place Huawei on the Department's list of companies, was this week's two efforts by the Trump Administration to attempt to curb national security risks. In an executive order, President Donald Trump effectively banned the use of equipment in the US communications network.

The US argued that Huawei 's smartphones and network equipment are believed to be used by China to inform Americans.

The latest commerce movements come as China has a more aggressive atmosphere in the trade war with the United States. Washington suggested that resuming talks between the world's two largest economies would be pointless unless Washington changed course.

A spokesman for Huawei, the world's largest communications equipment manufacturer, did not respond to an immediate comment request.

Huawei will spend about $ 11 billion out of the $ 70 billion spent on parts in 2018 for Qualcomm (NASDAQ: Intel (NASDAQ 🙂 and Micron Technology (NASDAQ :). If the Commerce Department issues a license, the US supplier will need a separate license to conduct a new business with Huawei, which would be very difficult to obtain, the spokesman said.

Like adding Huawei to Huawei 's list on a government publication on Tuesday, she said the temporary general license will last for 90 days and will be posted in the Federal Register.

"The goal is to prevent collateral damage to non-Huawei companies that use the equipment," said Kevin Wolf, an attorney in Washington Department of Commerce.

The entity list is likely to prohibit Huawei and its 68 affiliates in 26 countries from purchasing unauthorized US products and technologies.

The Entity List identifies companies that are considered to be involved in activities that contravene US national security or foreign policy interests.

In a final rule announced Thursday, the government relies on Huawei's listing of companies for pending criminal cases in connection with companies in Brooklyn, New York.

In January, the US prosecutor accused the Bank of Iran of providing US goods and services and bank fraud to transfer money abroad through the international financial system.

Huawei CEO Meng Wanzhou was arrested in Canada in December, resulting in a three-way diplomatic crisis involving the United States, China and Canada in connection with the prosecution.

Meng, released on bail, remains in Vancouver and is fighting for India. She was innocent and Huawei was convicted in New York.

Trump injected other considerations into the criminal case after Meng was arrested. He said Tom would step in to Reuters if he could help close the trade deal.


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