US government to limit trade restrictions on Huawei to prevent disruptions

The US government is preparing to rollback some of its planned restrictions on Huawei as the blacklisting of the Chinese telecoms giant would bring the servicing of its current customers to a halt.

It comes just days after US President Donald Trump placed Huawei and 70 of its affiliates on a blacklist that would require US firms to request a license before selling components to the Chinese firm.

In 2018, Huawei spent $11bn purchasing equipment from key tech firms such as Qualcomm and Intel, which specialise in building chips.

President Trump also signed an executive order earlier this week that would prevent the US market from using equipment built and supplied by Huawei after declaring a “national emergency” over the alleged threats posed to the security of the country’s communications infrastructure.

The US Department of Commerce is considering issuing a temporary general license “to prevent the interruption of existing network operations and equipment,” a spokeswoman told Reuters.

The move would allow Huawei to buy US goods in order to continue providing service to existing customers who need to maintain their networks. However, it would not be able to purchase components to build new products. The temporary general license would last 90 days.

It’s a sign that caution is being exercised by the US in the way it manouveurs around Huawei, as the Chinese firm’s supply chain spans the globe and any hit on its ability to buy necessary goods could have a significant knock-on effect.

Chinese authorities responded quickly to the proposed sanctions from the US this week, claiming that they would do what was needed to protect their companies.

In recent months, Huawei has drawn sharp scrutiny from Western countries around the security of its telecoms gear and the potential for the equipment to be used as a means of spying on behalf of the Chinese government - a claim that Huawei has consistently denied.

Huawei has partnered closely with mobile carriers planning to roll out 5G networks later this year, but has been swept into the ongoing trade war between the US and China.

A Chinese state newspaper said on Saturday that the US had “fabricated” claims about Chinese firms forcing foreign companies to hand over their intellectual property.

There have also been reports of a growing “Boycott Apple” movement in China as a means of fighting the criticism facing Huawei in the west.