United States eases restrictions on China's Huawei to maintain operational networks


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

Kevin Frayer | Getty Images News | Getty Images

The United States The government on Monday temporarily eased some trade restrictions last week in China's Huawei, which sought to minimize disruptions for customers of the telecommunications company around the world.

The United States The Department of Commerce will allow Huawei Technologies to purchase US-made products to maintain existing networks and provide software updates to existing Huawei phones.

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

The new authorization is intended to provide telecommunications providers who rely on the Huawei team's time to make other arrangements, Wilbur Ross said in a statement.

The authorization, which is valid for 90 days, suggests that changes in Huawei's supply chain can have immediate, far-reaching and unplanned consequences for its customers.

"The goal seems to be to prevent Internet systems, computers and cell phones from being blocked," said Washington lawyer Kevin Wolf, a former Commerce Department official. "This is not a capitulation, this is cleanliness."

Reuters reported on Sunday that Alphabet suspended Google's business with Huawei that requires the transfer of hardware, software and technical services, except those that are publicly available through open source licenses, including a source familiar with the subject.

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 issue said that Google would maintain its plan to cut off Huawei's access.

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

The Commerce Department said it will evaluate whether exemptions should be extended beyond 90 days.

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

The companies on the list are considered to be involved in activities contrary to national security or foreign policy interests of the United States.

Reuters reported on Friday that the department was considering a temporary flexibilization, a government spokeswoman.

Monday's announcement said the license was created as a temporary general license, effective until August. 19

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

Of the 70 billion dollars that Huawei spent buying components in 2018, some 11 billion dollars went to the US. UU Firms such as Qualcomm, Intel and Micron Technology.

"I think this is a reality check," said Washington Commerce Attorney Douglas Jacobson. "It shows how Huawei's products and technology are widespread throughout the world and if the US imposes restrictions, that has an impact."

Jacobson said the effort to keep existing networks operational seemed to be aimed at telecom providers in Europe and other countries where Huawei's team is widespread.

The measure could also help mobile service providers in sparsely populated areas of the US. UU., Like Wyoming and Eastern Oregon, who bought Huawei network equipment in recent years.

Wolf, the former Commerce official, said the temporary license was similar to the action taken by the department in July to prevent the systems from collapsing after the US. It banned ZTE from China, a smaller rival to Huawei, from buying components made in the United States in April.

The United States The commercial ban on ZTE wreaked havoc on wireless operators in Europe and South Asia, according to Reuters sources at the time.

The ZTE ban was lifted on July 13 after the company signed an agreement with the Department of Commerce that included $ 1 billion plus $ 400 million in deposit and replacement of its board of directors and senior management. ZTE, which had made major operations as a result of the ban, then resumed business.

-CNBC contributed to this report.

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