Apparently, the US government has temporarily eased trade restrictions imposed last week on China’s Huawei, after discovering that the countries rural networks would start to grind to a halt if they suddenly pulled the plug.
Now the US Commerce Department is left with the embarrassing situation where they made a dramatic move and now have to pull back a bit. It is the equivalent of storming out of the house after a row with your girlfriend only to discover that you have left the keys on the table and need to sheepishly knock on the door to be let back in.
It appears that after last weeks dramatic announcement the US Commerce Department just thought to ask the important question “what have Huawei ever done for us?” and discovered much like Monty Python’s Judean People’s Front the list is rather longer than it thought.
Now the Commerce Department will now allow Huawei Technologies to purchase American-made goods in order to maintain existing networks and provide software updates to existing Huawei handsets.
The new authorisation is intended to give telecommunications operators that rely on Huawei equipment time to make other arrangements, U.S. Secretary of Commerce Wilbur Ross said in a statement on Monday.
“In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks,” Ross added.
The license, which is in effect until 19 August suggests changes to Huawei’s supply chain may have immediate, far-reaching, and unintended consequences for its customers.
In short, the move is designed to stop US networks going tits up. The temporary license also allows disclosures of security vulnerabilities and for Huawei to engage in the development of standards for future 5G networks.
It is still prohibited from buying American parts and components to manufacture new products without license approvals that likely will be denied, but that is starting to look silly too.
Huawei founder Ren Zhengfei on Tuesday said the temporary reprieve move bore little meaning for the company as it had been making preparations for such a scenario.
“The U.S. government’s actions at the moment underestimate our capabilities,” Ren said in an interview with CCTV, according to a transcript published by the Chinese state broadcaster.
He said Huawei can make the chips it buys from the United States though that does not mean it will stop buying American chips.
Out of $70 billion Huawei spent buying components in 2018, some $11 billion went to U.S. firms including Qualcomm, Intel and Micron Technology.
A report on Monday on the potential impact of stringent export controls on technologies found that U.S. firms could lose up to $56.3 billion in export sales over five years. The report, from the Information Technology & Innovation Foundation, said the missed opportunities threatened as many as 74,000 jobs.
But hey, that will mean that America will be great again right?
