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US Relaxes Ban On Huawei To Help Existing Customers Of The Chinese Firm

US Relaxes Ban On Huawei To Help Existing Customers Of The Chinese Firm
In order to minimize disruption for the current customers of the Chinese firm Huawei in the US and elsewhere,. The United States has temporarily eased trade restrictions on it. However the founder of the largest telecom equipment maker of the world said that the measure by the US meant little because the company was already prepared for such a situation,
Last week, Huawei was banned from doing any business with any US companies by the U.S. Commerce Department  which was seen as an escalation of the ongoing trade war between the US and China Washington. The US alleges that Huawie is engaged in activities that the  are a threat to its national security. Huawei has repeatedly refuted all charges.
Last week the US increased import tariffs on Chinese goods worth $200 billion from 10% to 25% and which was retaliated by China by imposing tariffs on $60 billion of US goods imported into the country.
Huawei was given a license to purchase US goods till August of this year by the US Commerce Department on Monday to allow the Chinese company to maintain the existing telecoms networks that use its equipment and technology and be able to offer provide software updates to Huawei smartphones. According to market experts, this measure was given to US telecom service providers to allow them time to make alternative arrangements.
But the license does not allow Huawie to purchase American-made hardware and software for manufacturing of new products – for which the company would have to avail another license that is much harder to get.
The US ban has a little impact on the company because it had been preparing itself to meet such as scenario, said Huawei founder Ren Zhengfei on Tuesday to the Chinese state media. “The U.S. government’s actions at the moment underestimate our capabilities,” Ren said in an interview with CCTV, according to a transcript published by the Chinese state broadcaster.
The temporary license suggests changes to Huawei’s supply chain may have immediate, far-reaching and unintended consequences for its customers.
The news of the temporary relief to Huawie saw the Chinese yuan firm against the US dollar.
 “Given the Huawei decision, I feel they (China) have no choice but to retaliate, for face sake,” Cliff Tan, head of East Asian research at MUFG Bank in Hong Kong, told the Reuters Global Markets Forum on Tuesday.
The claim by Trump that his sanctions were encouraging companies to move out of China was rebuffed by Chinese Foreign Ministry spokesman Lu Kang at a press briefing, by saying that there was enthusiasm about chin China among foreign investors.  
Earlier this week, Alphabet Inc’s Google suspended some business with Huawei because of the blacklisting of the company by the US, said reports. That raised concerns about the future of those Huawei smartphones that run on Android operating system of Google.

Christopher J. Mitchell

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