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Trade war

US eases Huawei restrictions for existing business

Company still faces obstacles in buying American parts for new products

A woman looks at her phone while walking past a Huawei store in Beijing. The Chinese telecommunications equipment maker will be allowed to offer maintenance to U.S. clients for the next three months.    © Reuters

NEW YORK -- The U.S. Commerce Department is scaling back some of the restrictions imposed last week on American exports to Huawei Technologies, providing a buffer for the ripple effect felt across telecommunications-related industries from the original broader ban.

The department's Bureau of Industry and Security issued a 90-day "temporary general license," effective Monday through Aug. 19, allowing sales and services provided to Huawei and affiliates to support existing Huawei handsets as well as existing networks and equipment. Maintenance arrangements made between Huawei and customers up to May 16 for existing networks and equipment fall under the moratorium.

The company is still barred from buying American components to manufacture new products without license approvals that likely will be denied.

The 90-day license "grants operators time to make other arrangements and the Department space to determine the appropriate long term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services," Commerce Secretary Wilbur Ross said Monday. "In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks."

On Friday, the Commerce Department formally added Huawei to its Entity List, requiring all American companies to obtain a license to export to the Chinese technology giant, with all applications carrying a presumption of denial. Products sold to Huawei containing a significant portion of U.S. technology will also be affected, export control experts told Nikkei.

The blacklisting was coupled with President Donald Trump's executive order last week that does not single out the Chinese company by name but prohibits inbound business with foreign enterprises deemed a security risk by the U.S.

German chipmaker Infineon suspended shipments to Huawei after the Chinese company joined the Entity List, Nikkei has reported. Google had also said it is complying with the U.S. ban, a step seen as blocking it from offering technical support and updates for Huawei handsets powered by the Android operating system.

The American technology giant's move threatened Huawei's ambitions to dominate the global smartphone market. The Chinese company has risen to the second-largest vendor by shipment volume, ahead of Apple.

"Huawei will continue to provide security updates and after sales services to all existing Huawei and Honor smartphone and tablet products covering those have been sold or still in stock globally," it said in a statement Monday. "We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally."

Software updates or patches provided to Huawei handsets available to the public on or before May 16 are allowed for the 90-day period, according to the temporary general license posted Monday on the Federal Register website. Huawei mobile devices yet to hit the market are not covered.

The U.S. is also allowing cybersecurity risk disclosures to Huawei and engagement with the company as needed for 5G standards development.

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