US Government Eases Ban on Huawei for 90 Days

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Just a day after Google revoked Huawei’s Android license due to the ban imposed by the U.S. government, the latter has had a change of heart. In a bid to reduce disruption for its customers, the U.S. Commerce Department has eased some of the restriction imposed on Huawei.

The restrictions have only been eased on a temporary basis until August 19 (90 days) though.

Huawei will be able to buy goods from American companies to maintain its existing network infrastructure and also roll out software updates for its existing devices. However, it cannot buy parts from U.S. companies for manufacturing new products without a prior license. This move will ensure that telecommunication companies which rely on Huawei products in the U.S. will have ample time to look for alternatives.

The new authorization is intended to give telecommunications operators that rely on Huawei equipment time to make other arrangements, U.S. Secretary of Commerce Wilbur Ross said in a statement on Monday.

“In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks,” Ross added.

The U.S. Commerce Department can re-evaluate its decision on whether the license should be extended beyond 90 days or not.

Huawei’s founder and CEO Ren Zhengfei said that the temporary relief from the ban meant little for the company. He said that Huawei is involved in a war with the U.S. government and not US companies and that the company is more than capable of making chips it buys U.S. firms. He was also confident of the fact that Huawei’s 5G plans will not be affected by this move.

Our Take

Given the number of jobs at stake and the potential disruption the ban can cause, I am guessing the U.S. Commerce Department and Huawei will end up coming up with another solution. This is because if Huawei or China ends up retaliating in response to this move from the U.S. government, US companies would end up in a fix since their entire supply-chain is located in China.

[Via Reuters]