Trump and Google grant Huawei small respite

The Trump administration issued a licence on Tuesday that will allow US companies to keep doing business with Huawei for the next three months to attempt to contain the fallout from export restrictions on the Chinese tech company.

Under the licence, existing Huawei mobile phone users and rural broadband networks in the US will be able to continue operating normally, the commerce secretary, Wilbur Ross, said in a statement on Monday.

“The temporary general licence grants operators time to make other arrangements and the [commerce] department space to determine the appropriate long term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services,” he said.

The move should help third-parties who rely on Huawei’s equipment find alternative suppliers because some smaller telcos could suffer network outages if not given enough time to work the changes.

Following the reprieve, Google, who had said on the day before that it would stop providing Huawei with its Android software in order to comply with the export restrictions imposed by the White House, was expected to resume supplying its software to Huawei, said a source quoted by the Financial Times.

Last week, the Trump administration placed Huawei on a blacklist and banned US companies from doing business with it, unless they first obtained a special licence from the US government under a “presumption of denial”.

Ren Zhengfei, Huawei’s founder, said the reprieve “doesn’t mean much” and said: “We will not easily and narrowly exclude US chips [ ...] but if there is a supply shortage, we have a back-up. The current practice of American politicians underestimates our strength.”

The announcement of the restrictions led to a sharp fall in stock markets around the globe on Monday, and traders remained clearly cautious on Tuesday, despite a bounce for stocks.

Markets.com chief market analyst, Neil Wilson, said: “When can we stop talking about the US and China?

“After blacklisting the Chinese firm, the White House has issued a three-month reprieve to allow US companies to continue to do business with the group. It’s all rather like the way Trump slaps on tariffs but delays the execution to allow room for negotiation. Whether it’s Huawei or tariffs, I would see all of this in the broader context of a giant tug-of-war between the two superpowers being played out in front of our eyes. As such, the more this goes on the lower the chance of a meaningful resolution to any of it. Trade disputes ad infinitum, ad nauseum.”