Huawei, Shenzhen, China, trade war, tech war, US, headquarters
The exterior a Huawei buildings on July 30, 2019 in Shenzhen. (Image credit: TechNode/Shi Jiayi)

The Trump administration has extended the grace period of a trade ban on Huawei through May 15, allowing US companies to continue doing business with the Chinese telecommunications equipment giant.

Why it matters: The reprieve has already been extended four times and allows Huawei’s existing customers to keep purchasing its equipment. However, it is a concession more for rural US carriers than the telecommunications company.

  • Many small US telecommunications companies rely on Huawei as a source for equipment because its pricing is considerably cheaper than gear from European suppliers such as Ericsson and Nokia.
  • The Chinese company, on the other hand, insists that the extensions “won’t have a substantial impact” on its business. 
  • “This decision does not change the fact that Huawei continues to be treated unfairly. This has done significant economic harm to the American companies with which Huawei does business,” the company said in February.

Details: The US Commerce Department announced on Tuesday it was seeking public comment on whether a license allowing US companies to continue doing business with Huawei should be further extended, and that it had extended the license through May 15 to provide an “opportunity for public input.”

  • The 45-day extension announced in February is due on April 1. The department said it allowed rural telecom companies “the ability to continue to temporarily and securely operate existing networks while they identify alternatives to Huawei for future operation.”
  • Huawei declined to comment.

Context: The Commerce Department added the company to an “Entity List” on May 16, which bars American companies from selling or purchasing with the firm without government approval.

  • The department gave the company a 90-day grace period soon after the ban was imposed in May. The reprieve was later extended in August, November, and then in February.
  • In November, the US Federal Communications Commission voted to ban US carriers from receiving federal subsidies when purchasing equipment from Chinese telecom equipment makers Huawei and ZTE.

Writing about semiconductors and telecommunications.

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