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US grants Huawei another 90 days to buy from American supplier

Updated : August 19, 2019 07:36 PM IST

However, nearly 50 units of Huawei have been added to a US economic blacklist

US Commerce Secretary Wilbur Ross said on Monday that the US government will extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from US companies so that it can service existing customers, even as nearly 50 of its units were being added to a US economic blacklist.

The "temporary general license," due to expire on Monday, will be extended for Huawei for 90 days, he told Fox Business Network, confirming an expected decision. He also said he was adding 46 Huawei affiliates to the Entity List, raising the total number to more than 100 Huawei entities that are covered by the restrictions.

Ross said the extension was to aid US customers, many of who operate networks in rural America. "We're giving them a little more time to wean themselves off," Ross said.

Shortly after blacklisting the company in May, the Commerce Department initially allowed Huawei to purchase some American-made goods in a move aimed at minimising disruption for its customers.

The extension, through November 19, allows the Chinese company to maintain existing telecommunication networks and provide software updates to Huawei handsets.

Asked what will happen in November to US companies, Ross said: "Everybody has had plenty of time to take notice of it. There have been plenty of discussions with the president."

When the Commerce Department blocked Huawei from buying US goods earlier this year, it was seen as a major escalation in the Sino-US trade war.

The US government blacklisted Huawei, alleging the Chinese company is involved in activities contrary to national security or foreign policy interests.

As an example, the blacklisting order cited a pending federal criminal case concerning allegations Huawei violated US sanctions against Iran. Huawei has pleaded not guilty in the case.

The order noted that the indictment also accused Huawei of “deceptive and obstructive acts.”

At the same time the United States says Huawei's smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied.

Huawei, the world's largest telecommunications equipment maker, is still prohibited from buying American parts and components to manufacture new products without additional special licenses.

Many Huawei suppliers have requested the special licenses to sell to the firm. Ross told reporters late last month he had received more than 50 applications, and that he expected to receive more. He said on Monday that there were no "specific licenses being granted for anything."

Out of $70 billion that Huawei spent buying components in 2018, some $11 billion went to US companies including Qualcomm, Intel and Micron Technology. Intel declined to comment on Monday.