Just hours after Google LLC and a number of prominent computer chipmakers announced they were suspending business with Huawei Technologies Co. Ltd., the Chinese firm has gotten a temporary reprieve.
Reuters reported late today the U.S. government has eased some of the restrictions placed on Huawei last week in order to alleviate some of the “unintended consequences” of its move.
News that Google was cutting ties with Huawei was reported late Sunday, following U.S. President Donald Trump’s decision last week to sign an executive order that, although not naming Huawei specifically, prevents U.S. firms from doing business with it. Responding to Trump’s order, the U.S. Commerce Department added Huawei to the Bureau of Industry and Securities Entity List, which requires foreign companies to obtain the government’s permission before U.S. firms can sell or transfer technology to them.
Trump’s move came amid fears that Huawei’s equipment could be used by the Chinese government to spy on American communications. The U.S. has previously described Huawei as an arm of the Chinese government, and its intelligence services have warned against using its products. U.S. government agencies have already been banned from using Huawei’s equipment.
Analysts have speculated that the ban could cripple Huawei’s smartphone business since it will not be able to install the latest version of the Android operating system on its new handsets, nor would it have access to Google apps such as Gmail, YouTube and the Play Store.
The Commerce Department said Huawei will be allowed to continue buying U.S.-made products in order to maintain its existing networks and provide software updates to its existing handsets.
However, the company is still subject to a ban on buying American-made components from U.S. firms to manufacture new products without a license approval. Any application for a license by Huawei would likely be denied, Reuters said.
Most likely, the U.S. government’s latest move was driven by the realization that an immediate ban on Huawei would likely have far-reaching consequences for its customers, which include both U.S. consumers and companies.
Kevin Wolf, a former Commerce Department official, told Reuters that Washington officials were trying to prevent any “network blackouts.”
Huawei’s reprieve comes in the form of a “temporary general license” that will stay in effect until Aug. 19. Under that license, Huawei is allowed to continue buying goods needed to maintain its existing networks and provide software updates to its smartphones.
Holger Mueller, an analyst with Constellation Research Inc., told SiliconANGLE the reprieve was necessary because things can break without any notice.
“So there are 90 days for Huawei to plan and source or build otherwise,” Mueller said. “That’s common for this stuff, as components are already on boats and in shipping containers, having been sold or promised to customers. But Huawei still faces a formidable challenge ahead.”
Photo: Laboratorio Linux/Flickr
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