US technology companies will be allowed to continue selling to Huawei under certain circumstances for another three months, after the US commerce secretary extended a temporary reprieve for groups such as Google.
Wilbur Ross on Monday said the Trump administration would extend a temporary licence for companies to sell to the Chinese telecoms equipment maker if they are selling repairs or updates to existing systems.
The exemption, which will apply for a further 90 days, only applies if the products in question are deemed not to pose a threat to national security.
The reprieve will allow Google to continue updating its Android software on Huawei smartphones, for example. It has been issued despite an increase in hostile rhetoric from US president Donald Trump towards the Chinese company.
Mr Ross said in a statement: “As we continue to urge consumers to transition away from Huawei’s products, we recognise that more time is necessary to prevent any disruption.”
Separately, he told the Fox Business television channel that the move would allow rural US telecoms companies that use Huawei “a little more time to wean themselves off”.
Mr Trump took action against the Chinese company earlier this year, announcing he would prepare the way for a ban on Huawei products in the US and immediately prohibit it from buying American-made goods. US security officials argue the company poses a risk to national security because its telecoms equipment could be used by Beijing for spying.
Since then, some of the largest US telecoms and technology companies have been lobbying against the stringent measures, arguing they will be costly without damaging Huawei, which can ship in many of their supplies from elsewhere. In response, the Trump administration issued a temporary exemption in May.
In recent months, Mr Trump has tied the fate of the company to the outcome of the US-China trade talks. Earlier in the summer, he appeared to offer an olive branch to Beijing when he said the export ban would be relaxed, but this weekend he once again stepped up his rhetoric against the company.
The president told reporters on Sunday: “Huawei is a company we may not do business with at all.
“We’re looking really not to do business with Huawei . . . it’s very difficult to determine what’s coming in, what’s not coming in, it’s still Huawei.”
However, Larry Kudlow, the president’s economic adviser, said over the weekend that the extension was being granted to help US companies rather than to please Beijing.
He told NBC: “I think it’s a good faith action, again, helping American companies who need a couple more months to make adjustments if they can get licences. And this assumes, by the way, no national security sensitivity. So that’s not changing.
“But we’re giving a break to our own companies for three months.”
The US-China trade skirmish has sparked financial market tumult repeatedly in recent weeks as fears grow about the potential toll it could take on the global economy.
Germany’s Bundesbank said on Monday that the country, seen as particularly exposed to trade fluctuations because of its large export sector, is likely to tip into a recession in the third quarter.
S&P Global, the ratings group, said last week that “unpredictability on the trade front and deteriorating global backdrop” left its analysts on “high alert” over the outlook for the US economy.
