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Ban On Huawei Could Be Scaled Back By US To Serve Current Customers: Reuters


05/18/2019


Ban On Huawei Could Be Scaled Back By US To Serve Current Customers: Reuters
The restrictions on the Chinese tech company Huawei imposed because of the black listing of the company by the US Commerce Department earlier this week can be scaled back to an extent because the blacklisting can make it impossible for the company to service the existing customers.
 
According to a report from Reuters, a spokeswoman for the US Commerce Department said that a temporary general license is being contemplated to be issued by the department to “prevent the interruption of existing network operations and equipment” because the ability of the company to buy American-made parts and components had been effectively and completely halted by the black listing. 
 
According to the report, an example of the American people who would be benefited by the license include those entities providing internet access and mobile phone services in thinly populated places such as Wyoming and eastern Oregon which makes use of Huawei manufactured network connection equipment for many years now.
 
Hence if such a license is issued to Huawei by the Commerce Department, it would mean that the Chinese firm would be able buy US made parts to enable it to serve the existing US customers by maintaining the reliability of networks and equipment. However Huawei would not be allowed to manufacture new products using US made parts even with the provisional license.
 
According to analysts, the decision of the scaling back of the ban clearly indicates assumption of immediate, far-reaching and unintended consequences for any changes happening to the supply chain of Huawei because of its black listing.
 
The blacklisting of Huawei which is officially known as putting a foreign company in an entity list is viewed to be another of the measures by the Trump administration to reduce threats to national security – especially telecom security. The executive order that was passed by Trump earlier this week effectively banned the use of Huawei equipment by any of the US telecom service providing companies. 
 
The US is concerned that the equipment supplied by Huawei and used by companies in the US would be used by Chinese agencies to spy on the country and therefore the company and its equipment are a threat to national security. All such allegations have been repeatedly denied by Huawei.
 
This latest move by the US Commerce Department about the blacklisting happened at a time when the China has increased its rhetoric in the trade war with the United States and has recently said that unless Washington changed course, holding trade talks between the two largest economies of the world would be meaningless.
 
“The goal is to prevent collateral harm on non-Huawei entities that use their equipment,” said Washington lawyer Kevin Wolf, a former Commerce Department official, reported Reuters.
 
It is now Huawei alone but its 68 affiliate companies based in in 26 different countries have all been banned from purchasing US components or selling their products to any US firm.
 
(Source:www.reuters.com)