The U.S. Commerce Department is expected to allow rural operators to continue doing certain transactions with Chinese vendor Huawei during an additional six-month period, Politico reported, citing sources familiar with the matter.
Huawei, which had been blacklisted by the U.S. government in May, has been able to continue doing business with U.S. companies through a special temporary license, which initially ran for 90 days following the ban, but was later extended. It is due to expire on November 19th.
The so-called temporary general license allows U.S. firms to continue to make a limited number of transactions with the Chinese vendor, such as supplying existing networks and equipment and providing software updates to Huawei handsets, according to the report.
Commerce Secretary Wilbur Ross acknowledged in August that several rural carriers in the country depend on Huawei equipment. The decision to extend this waiver will allow Huawei to purchase any U.S.-origin hardware or software it needs to continue supplying rural internet providers.
However, this general license does not cover transactions between U.S. semiconductor manufacturers such as Qualcomm, Intel and Micron. These companies are required to apply for special permits in order to continue supplying chips to Huawei.
U.S. chipmakers have argued that semiconductors used in most of Huawei’s phones are widely available on the global market and exports do not represent a national security risk. The U.S. semiconductor industry has argued the export ban is hurting U.S. companies by giving an advantage to foreign competitors in South Korea and Taiwan.
“We encourage prompt action to issue approvals for sales that do not implicate national security concerns, particularly where there is foreign availability for competing products,” the Semiconductor Industry Association said in a recent letter to Commerce Secretary Wilbur Ross.
Earlier this month, U.S. Commerce Secretary Wilbur Ross confirmed that the U.S. government would soon start to issue the first licenses for U.S firms looking to sell components and software to Chinese vendor Huawei.
Ross said that the U.S. government had received 260 applications from companies looking to do business with Huawei.
Ross also said that the government was surprised by the number of requests and planned to “approve quite a few of them”, with licenses “forthcoming very shortly”.
In May, the U.S. Department of Commerce added Huawei to its Entity List, a decision that effectively banned the company from buying parts and components from U.S. companies without U.S. government approval. Under the order, Huawei will need a U.S. government license to buy components from U.S. suppliers.
At that time, firms including Google, Intel, Qualcomm and Microm halted shipments due to the restrictions. Huawei relies heavily on computer chips imported from U.S. companies.
In July, President Donald Trump agreed to grant “timely” licensing decisions to U.S. technology firms that want to sell components and services to Huawei. Trump said that these licenses will include goods not considered to pose a national security risk.
