The US Department of Commerce on Friday said that it might soon scale back restrictions on Huawei Technologies after this week’s blacklisting would have made it nearly impossible for the Chinese company to service its existing customers.
The department, which had effectively halted Huawei’s ability to buy US-made parts and components, is considering issuing a temporary general license to “prevent the interruption of existing network operations and equipment,” a spokeswoman said.
For example, potential beneficiaries of the license could include Internet access and mobile phone service providers in thinly populated places such as Wyoming and eastern Oregon that purchased network equipment from Huawei in the past few years.
In effect, the department would allow Huawei to purchase US goods so it could help existing customers maintain the reliability of networks and equipment, but the Chinese firm would still not be allowed to buy US parts and components to manufacture new products.
The potential rule rollback suggests changes to Huawei’s supply chain might have immediate, far-reaching and unintended consequences.
The blacklisting, officially known as placing Huawei on the department’s “Entity List,” was one or two efforts by the administration of US President Donald Trump this week allegedly made in an attempt to thwart national security risks.
In an executive order, Trump also effectively barred the use of Huawei’s equipment in US telecom networks.
The US believes that Huawei’s smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied.
The latest department move came as China has struck a more aggressive tone in its trade war with the US, suggesting talks between the world’s two largest economies would be meaningless unless Washington changed course.
Out of US$70 billion Huawei spent buying components last year, about US$11 billion went to US firms, including Qualcomm, Intel and Micron Technology.
If the department issues the license, US suppliers would still need separate licenses to conduct new business with Huawei, which would be extremely difficult to obtain, the spokeswoman said.
“The goal is to prevent collateral harm on non-Huawei entities that use their equipment,” said Washington lawyer Kevin Wolf, a former department official.
The addition into the Entity List bans Huawei and 68 affiliates in 26 countries from buying US-made goods and technology without licenses that would likely be denied.
The list identifies companies believed to be involved in activities contrary to the national security or foreign policy interests of the US.
In a final rule posted on Thursday, the government tied Huawei’s listing to a criminal case pending against the company in Brooklyn, New York.
US prosecutors in January unsealed the indictment accusing the company of engaging in bank fraud to obtain embargoed US goods and services in Iran and to move money out of the country via the international banking system.
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