Home Business Huawei Ban | Will the US ever do business with China’s Huawei again?

Huawei Ban | Will the US ever do business with China’s Huawei again?

by Feritter Owich
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Huawei’s 90-day reprieve expires today

China’s Huawei was banned from doing business with the US earlier this year as the firm was swept into a trade war between the US and China, which has seen punitive tariffs slapped on billions of dollars worth of two-way trade.

The company was blacklisted by the US because of mistrusts that it provides a backdoor for Chinese intelligence services, although this is something Huawei denies. The decision limited Huawei’s access to important components and to the Android operating system as well as Google applications.

On Friday, citing two sources, Reuters reported that the U.S. Commerce Department was set to issue another 90-day grace period to Huawei Technologies Co Ltd that permits the Chinese firm to buy supplies from US companies so that it can service existing customers.

The “temporary general license” will renew a reprieve set to expire today. This agreement will reportedly let Huawei both maintain current telecom networks and supply software updates for phones. Simply meaning that your P30 Pro should still be up to date months after the ban took effect, or even stay current throughout 2019.

Thereafter, earlier on Sunday, National Economic Council Director Larry Kudlow said the Commerce Department would extend the Huawei licensing process for three months as a gesture of “good faith” amid broader trade negotiations with China. 

“We’re giving a break to our own companies for three months,” Kudlow told NBC’s Meet the Press program. 

Although on Sunday evening, the US president said:

“Huawei is a company we may not do business with at all.”

“At this moment it looks much more like we’re not going to do business,” Trump told reporters on Sunday as he boarded Air Force One in New Jersey.

“I don’t want to do business at all because it is a national security threat and I really believe that the media has covered it a little bit differently than that,” he said.

Even as his administration weighs whether to extend a grace period for the company, he added that there were small parts of Huawei’s business that could be exempted from a broader ban, but would be “very complicated”.

By saying he does “not want to do business at all” with the Chinese telecoms company, Donald Trump has cast doubt on any reprieve for US companies selling to Huawei.

Putting into consideration that Trump did not say whether his administration would extend the “temporary general license” as he spoke on Sunday.  This appears to contradict the commerce department official over whether the trade extension will be granted.

Huawei previously got a 90-day reprieve last May which expires this August 19; today. This allows Huawei to continue operations and work with other US companies until the reprieve ends. After that,  US companies who still want to work Huawei would have to process a permit to do so.

However, an extension of the reprieve on Huawei would be a victory for the business community, which has pushed hard for more flexibility with regards to the Chinese company. This reprieve could make or break Huawei’s grip on the US market.

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