Home / Technology / The United States facilitates restrictions on China's Huawei to keep the network in operation

The United States facilitates restrictions on China's Huawei to keep the network in operation



The Huawei logo is seen on the main building side at the company's production campus on April 25, 2019 in Dongguan, near Shenzhen, China.

Kevin Frayer | Getty Images News | Getty Images

The US government on Monday temporarily facilitated some trade restrictions introduced in China for Huawei last week, an attempt to minimize disruptions to telecoms customers around the world.

The US Commerce Department will allow Huawei Technologies to buy US merchandise to maintain existing networks and provide software updates to existing Huawei phones.

The company is still prohibited from buying US parts and components to manufacture new products without license approvals that are likely to be denied.

The new license is intended to provide telecom vendors who rely on the Huawei equipment's time to make other arrangements, said US Trade Minister Wilbur Ross in a statement.

The authorization, which is valid for 90 days, suggests changes in the Huawei supply chain may have immediate, widespread and unintended consequences for their customers.

"The goal seems to be to prevent Internet, computer systems and mobile phones from crashing," said Washington lawyer, Kevin Wolf, a former trade department official. "This is not a surrender. This is housekeeping."

On Sunday, Reuters reported that Alphabets Google's deferred business with Huawei, which requires hardware, software, and technical services transfer, except those available to the public through open source license, with reference to a source familiar with the matter.

Google did not immediately respond to a request for comment on the new authorization. However, the Wall Street Journal reported that a person familiar with the matter said that Google would stop its plans to reduce Huawei's access.

Huawei, the world's largest telecom equipment manufacturer, declined to comment on CNBC.

Trade The department said it will evaluate whether the extensions will be extended over 90 days.

On Thursday, the US Department of Commerce Huawei and 68 units added an export blacklist which made it almost impossible for the Chinese company to buy goods made in the United States

Companies on the list are considered to be involved in activities that are contrary to the United States National Security or foreign policy interests.

On Friday, Reuters reported that the department was considering a temporary relief and quoted a spokesman from the government.

Monday's announcement said the authorization was created as a temporary public license, in effect until August 1

9.

The license also allows disclosure of security vulnerabilities and for Huawei to engage in the development of standards for future 5G networks.

Huawei spent over $ 70 billion to buy components in 2018, and about $ 11 billion went to US companies, including Qualcomm, Intel, and Micron Technology. [19659002] "I think this is a reality check," says Douglas Jacobson, Washington's commercial director. "It shows how extensive Huawei goods and technology exist around the world and if the US puts restrictions, it has consequences."

Jacobson said efforts to keep existing networks working were targeted at telecom providers in Europe and other countries where Huawei equipment

The relocation can also help mobile service providers in densely populated areas of the United States, such as Wyoming and Eastern Oregon, who purchased network equipment from Huawei in recent years.

Wolf, the former trading officer, said the temporary license was similar to the actions the department made in July to prevent the systems from crashing after the United States banned China's ZTE, a smaller Huawei rival, from buying US components in April.

United States trade ban on ZTE caused chaos in wireless carriers in Europe and South Asia, sources told Reuters at that time.

The ban on ZTE was lifted on July 13 after the company reached an agreement with Commerce Deparment containing a $ 1 billion fine plus $ 400 million in escrow and compensation of its board and management. ZTE, which had ceased operations due to the ban, resumed its operations.

CNBC contributed to this report.


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