U.S. May Modify Trade Restrictions against Huawei to Assist Existing Customers

The United States revealed it may review current trade restrictions imposed against Chinese technology company Huawei. The trade restrictions made it impossible for the Huawei to purchase mobile technologies spare parts and components manufactured in the U.S. But having found that blacklisting the Chinese company is hurting some existing customers in the U.S., the government said it might scale back its restrictions for a temporary relief.

The U.S. Commerce Department said it might issue a temporary general license to enable Huawei buy American-made parts and components for its technology products. According to a spokeswoman, the department said this move will make it possible for existing networks and equipment to operate without interruptions.

It is believed that certain U.S. states such as Wyoming and eastern Oregon among others will benefit from the relief. Wyoming and eastern Oregon bought network equipment from Huawei not too long ago and require continued Huawei support to operate them efficiently. To this extent, Huawei will now be allowed to buy U.S. products to enable existing customers maintain the integrity of networks and equipment efficiently.

The Trump Administration Accuses Huawei of Spying on Americans

However, Huawei will not be allowed to purchase U.S.-produced components for the manufacture of any new products.

Imposing trade restrictions against Huawei is an effort of the Trump administration to protect national security. According to the Trump government, Huawei is being used by the Chinese government to spy on the United States. The government alleges that the Chinese government is using Huawei’s smartphones and network equipment to carry out espionage on Americans.

Trump therefore invoked an executive order prohibiting the use of the Chinese company’s equipment in America’s telecommunication networks.

Huawei debunks the allegations as spurious, and the Chinese government said there is no substance to it.

Last year, Huawei spent about $70 billion to purchase spare parts and components from suppliers worldwide. About $11 billion of the purchase went to U.S. companies including Intel Corp, Qualcomm and Micron Technology.

Huawei, ZTE and 68 Affiliates from 26 Countries Are Affected By the Trade Sanction

If the U.S. government goes ahead to issue a temporal general license for Huawei to do business with it, it means U.S. firms will also obtain separate licenses to trade with the Chinese company. Apart from the fact that it will be very difficult to be granted the licenses, it is almost certain that applicants will be denied it.

The Commerce Department said the temporary general license will work for 90 days. It will be published in the Federal Register, and the initiative blacklisting Huawei will be published in the same register.

Huawei is not the only entity banned by the Commerce Department, 68 affiliates from 26 countries are also banned from purchasing American-made technology and goods without the licenses. All the banned entities are believed to engage in activities inimical to the national security or foreign policy interests of the U.S. government.

Huawei Said They Are Innocent and Will Not Bow To America’s Monitoring

To drive home its point, the Trump administration connected its trade restriction on Huawei with a pending criminal case in New York. Prosecutors in January accused Huawei of buying U.S. sanctioned goods and services in Iran through bank fraud. They also allege the Chinese company illegally moves huge money out of the U.S. through loopholes in the international banking system.

The U.S. government links Meng Wanzhou’s arrest in Canada with the restriction. Wanzhou is Huawei’s chief financial officer and the daughter of Huawei founder and CEO Ren Zhengfei. She was arrested in December as a result of the indictment, a situation that led to a three-pronged crisis between the U.S, China and Canada. Wanzhou was released on bail and continues to fight extradition from Canada, and her company has pleaded not guilty in New York.

In response to the U.S. imposed restrictions, Huawei’s founder Zhengfei said the restriction will not impact his company in any significant way. According to the South China Morning Post, Zhengfei said his company’s growth may be slowed slightly even as he maintained that Huawei has not violated any laws to warrant the trade ban.

ZTE Corp, another Chinese company, was also sanctioned by the Trump administration. ZTE has accepted to be monitored by the U.S. to show that it does not contravene American interests in any way. But according to Zhengfei, Huawei “will not change our management at the request of the U.S. or accept monitoring as ZTE has done.”