The US plans to issue a 90-day trade license extension to Chinese electronics giant Huawei today (Nov. 18), allowing it to continue operating its business with American companies. Reuters’ report on Friday said an initial two-week extension was expected since a longer allowance was getting delayed due to regulatory hurdles. However, a new report by the New York Times, anonymous sources said the confirmation for the 90-day extension reportedly came over the weekend.
The US Government added Huawei to its economic blacklist back in May, citing concerns for a breach in national security. However, the US Department of Commerce allowed Huawei to continue purchasing American-made goods back in August, and the deadline ends on Nov. 18. The extension is yet to be officially announced while Huawei and the US Commerce Department declined to comment on the rumors.
The official statement for allowing Huawei to continue running its business with American companies is to help rural carriers stay in business. Most smaller companies use equipment from Huawei and ZTE to keep the costs down. The government does not want to put pressure on these smaller operators that are already struggling to offer seamless connectivity in rural areas. Wilbur Ross, the Commerce Secretary released a statement to Fox Business Network on Friday claiming some rural carriers rely on Huawei for 3G and 4G connectivity. Putting a permanent ban on Huawei will disrupt telephone services in rural America.
The development comes at a time when the trade war between America and China is nearing its first anniversary. It is no secret that the US Government plans to prolong Huawei’s ordeal as it is a huge bargaining chip in its trade war with China. Although Huawei is not an official part of the negotiations, The US Government is expected to keep its clutches on the company, at least till Phase 1 of the negotiations is through.
US Attorney General William Barr in a statement last week said, “ZTE and Huawei cannot be trusted” as he backed a proposal barring US wireless operators from using an $8.5 billion government fund to purchase services or equipment from the Chinese duo. President Donald Trump had signed an executive order back in May, barring US companies from purchasing telecommunications equipment from companies that pose a threat to its national security. The US Department of Commerce was instructed to come up with an enforcement plan by mid-October, but that is yet to be published.
The Commerce Department is also considering over 200 requests to grant individual licenses to US companies allowing them to sell components to Huawei. No action on that regard is expected on Monday.
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