The U.S. government is expected to tighten restrictions on exports to Huawei by American firms further very soon.
What you need to know
- The Commerce Department has issued a 45-day extension that allows American companies to continue trading with Huawei.
- The existing temporary general license, which was granted in November last year, was set to expire on February 16.
- Huawei was added to the Entity List by the U.S. Commerce Department in May last year.
Just a day after Huawei and its subsidiaries were charged with racketeering and stealing trade secrets from U.S. firms by the Justice Department, the Commerce Department has announced that it is extending the Temporary General License for Huawei and its subsidiaries on the Entity List for an additional 45 days.
Even though Huawei and its subsidiaries were added to the Entity List by the Trump administration in May last year, a full ban is yet to come into effect. The third 90-day reprieve, which was issued in November, was set to expire on February 16.
The Commerce Department says it decided to extend the Temporary General License granted to the Chinese company to prevent interruption of network communication systems in the rural U.S. Since many carriers in rural America rely on Huawei’s networking equipment, the latest license extension will provide time for companies to switch to alternative equipment and technology.
For Huawei, however, the latest extension is certainly not good news. This is the first time that the Commerce Department has cut the extension in half. The Trump administration is soon expected to enforce further restrictions on technology exports to Huawei by revising export control rules. Once the new restrictions come into place, U.S. companies will no longer be able to get around the trade ban on Huawei.
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