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U.S. Gives Huawei Another 90-Day Reprieve Amid Concerns Of Rural Service Disruptions

Aug 19, 2019
Originally published on August 19, 2019 12:50 pm

Updated at 12:45 p.m. ET

The Trump administration is extending a reprieve for Huawei Technologies and U.S. companies working with the telecom giant by 90 days, the Commerce Department announced Monday.

The decision permits Huawei to continue buying products from American companies to support its existing customers. It was made, in part, to minimize disruption in parts of rural America that rely on relatively inexpensive Huawei equipment to carry wireless service in remote areas, Commerce officials said.

"It is another 90 days for the U.S. telecom companies," Commerce Secretary Wilbur Ross said on Fox Business Network. "Some of the rural companies are dependent on Huawei. So we're giving them a little more time to wean themselves off."

At the same time, the Trump administration is continuing to apply pressure to Huawei. Forty-six Huawei subsidiaries are being added to what is known as the Commerce Department's "Entity List," a kind of blacklist that bans U.S. companies from doing business because of national security concerns, Commerce officials said Monday.

"The Department concluded that the company is engaged in activities that are contrary to U.S. national security or foreign policy interests," Commerce officials said in a statement, citing alleged federal violations including providing financial services to Iran and obstructing justice in connection with a probe into violations of U.S. sanctions.

"We now have more than 100 subsidiaries on the Entity List," Ross said.

The additional 46 Huawei affiliates now on the U.S. blacklist are located in countries including Denmark, France, India, Mexico, the United Kingdom and numerous others.

Huawei decried what it called "unjust treatment," asking the U.S. to remove it from the list.

"It's clear that this decision, made at this particular time, is politically motivated and has nothing to do with national security," the company said in a statement. "These actions violate the basic principles of free market competition. They are in no one's interests, including US companies. Attempts to suppress Huawei's business won't help the United States achieve technological leadership."

Monday's news follows tough talk from President Trump, who told reporters on Sunday that he does "not want to do business at all" with Huawei.

The U.S. views Huawei as a national security threat, saying it has close links with the Chinese government and that its smartphones and network equipment could be used for surveillance by China. Huawei has denied such allegations.

In May, the Trump administration blacklisted Huawei from buying American-made products but eased off days later, extending a 90-day grace period.

The next deadline, Ross said, is Nov. 19.

A major worry for Ross is the next generation of wireless technology, known as 5G, as Huawei works alongside U.S. chipmakers to develop the wireless service.

"Think about it, 5G is going to affect everything, all the way to GPS all the way to any function you can imagine," Ross said. "And as the Internet of things becomes more and more extensive, nothing will operate if somebody interferes with 5G, so the magnitude of the risk is far greater."

The Trump administration's tensions with Huawei became inflamed after Chief Financial Officer Meng Wanzhou was detained last year in Canada at the request of U.S. authorities, who are seeking her extradition.

Meng, who is the daughter of the Chinese tech giant's founder and CEO, is suspected of committing bank fraud while trying to skirt U.S. sanctions on Iran.

Copyright 2019 NPR. To see more, visit https://www.npr.org.