Update Monday, August 19, 2:15pm: As expected, the US Department of Commerce made the extension official today. Effective today, Huawei has another 90-day Temporary General License that will allow it to support its existing customers until November 18, 2019.
The press release includes a statement from Secretary of Commerce Wilbur Ross, saying, “As we continue to urge consumers to transition away from Huawei’s products, we recognize that more time is necessary to prevent any disruption. Simultaneously, we are constantly working at the Department to ensure that any exports to Huawei and its affiliates do not violate the terms of the Entity Listing or Temporary General License.”
In addition to the 90-day extension, the Department of Commerce expanded the scope of the export ban and added 46 additional Huawei affiliates to the entity list.
Original Post: Back in May, the US government placed an export ban on Huawei barring US companies (and companies using US-origin technology) from doing business with the Chinese tech giant. Because Huawei still has customers to support in the smartphone and cellular infrastructure business, the US Department of Commerce gave Huawei a 90-day exemption on the ban, allowing it to support its existing customers. That 90-day license was issued on May 20, 2019, so it expires this Monday, August 19. Now what?
According to a report from Reuters, the US Government is just going to kick the can down the road again and give Huawei another 90-day extension to support its customers. Sources tell Reuters the deal is “expected” to be renewed this weekend, pending a call between US President Donald Trump and Chinese President Xi Jinping.
Back in May, the Department of Commerce described the exemption, saying, “The Temporary General License grants operators time to make other arrangements and the Department space to determine the appropriate long-term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services. In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks.”
Huawei was banned from doing business in the US due to concerns the company could be used by the Chinese government to spy on Americans. Huawei has repeatedly denied it spies for the Chinese government. A recent report from The Wall Street Journal claims the company was helping African governments spy on their citizens, which Huawei also denied.
We went through this whole song and dance last year with the banning and unbanning of Chinese firm ZTE, which eventually saw ZTE accept fines and a change to management as a condition for reopening. Huawei is one of China’s biggest companies, which has to make you wonder what retaliation from China would look like if these talks fall apart. In the past, the country has threatened to block iPhone sales if the trade war escalates.