Commerce Secretary Wilbur Ross said, ‘As we continue to urge consumers to transition away from Huawei’s products, we recognize that more time is necessary to prevent any disruption.

Trump Administration Delays Ban on Huawei Working With U.S. Firms

par THE WALL STREET JOURNAL | le 22 août 2019


Chinese telecom company gets 90-day extension that has allowed it to do some business within U.S.

By

Katy Stech Ferek and  Drew FitzGerald

WASHINGTON—The Trump administration agreed Monday to allow some U.S. companies another 90 days to continue doing business with Huawei Technologies Co., a move it said would help small rural telecom carriers dependent on Huawei gear.

The Commerce Department put the Chinese telecom giant on an export blacklist in May, but later granted an exception that allowed some of its U.S. customers to continue receiving support. Monday’s action extends that deadline.

“As we continue to urge consumers to transition away from Huawei’s products, we recognize that more time is necessary to prevent any disruption,” Commerce Secretary Wilbur Ross said in a statement.

It wasn’t immediately clear how the Commerce decision would affect U.S.-China trade talks, in which Huawei has emerged as a bargaining chip.

“I don’t see this as having a huge impact either way because the issue itself is so much broader,” said Martijn Rasser, a senior fellow at the Center for a New American Security, a Washington-based think tank.

The U.S. considers equipment from the Shenzhen-based telecom-equipment maker a national-security risk, a position both Huawei and Beijing dispute. China wants restrictions eased as a condition for any accord.

Monday’s action will most directly affect about 40 mostly rural U.S. cellphone carriers and cable operators that Huawei said it served. The federal government and analysts estimate Huawei hardware makes up less than 1% of equipment used by U.S. telecom networks.

Members of Congress have proposed but not enacted legislation that would reimburse rural carriers for the cost of replacing certain Chinese equipment. Managers at some of the companies have complained that those proposals wouldn’t go far enough in compensating them.

“We’re a small company,” said Jim Kail, chief executive of rural Pennsylvania internet provider LHTC Broadband. “We’re going to have to have our crew spend a significant amount of time swapping equipment that worked perfectly fine.”

Eastern Oregon Telecom chief Joe Franell said political pressure has kept his company from considering Huawei equipment for a planned fiber-optic-internet project. But he said he was reluctant to replace already-installed Huawei electronics without knowing more about the future federal requirements and how much they might cost the company.

“Is it really about national security or is it just about trade?” Mr. Franell asked. “We don’t know what the hell to do.”

Monday’s extension, he added, does nothing to address the uncertainty federal policies have created.

 

In addition to giving rural carriers more time, the 90-day extension allows tech companies to continue pushing software updates to Huawei hardware. Alphabet Inc. ’s Google, for example, can update its Android operating system on Huawei phones.

The Commerce action in May against Huawei and its affiliates barred U.S. chip makers and other companies from supplying the Chinese gianttelecommunications giant.

Mr. Trump, meeting with China’s President Xi Jinping on the sidelines of a global summit in June, agreed to consider granting exemptions to U.S. companies for gear that wouldn’t pose a security risk.

No such exemptions have yet been granted, however, although a Commerce Department spokeswoman Monday said the exemption process remains in place.

At the same time, the Commerce Department said Monday it had identified 46 more Huawei affiliates that need to be added to the blacklist.

In response, Huawei released a statement calling those additions “politically motivated.” The company also said the extension “does not change the fact that Huawei has been treated unjustly.”

In comments to reporters Sunday, Mr. Trump reiterated that he considered Huawei a security risk. “Ultimately we don’t want to do business with Huawei, for national security reasons,” he said.

The ban in May initially raised questions about whether U.S. customers using Huawei equipment could receive service and support, or even communicate with the company.

Shortly after the move, Commerce officials announced a temporary license authorizing some transactions between Huawei and U.S. business partners, including rural wireless carriers that use its equipment. It also enabled Huawei to support its handsets.

Monday’s action extends that license until November, preventing technical disruption. It also enables a narrow slice of U.S. suppliers to send parts to Huawei and its division that works with rural carriers.

Allies are under U.S. pressure to shun Huawei. But the company’s prevalence in existing telecom networks and dominance in 5G technology make that nearly impossible.