© REUTERS/Eric Gaillard/File Photo
Two steps forward, one step back.
The Trump administration has seemingly been trying to calibrate its strategy around its intensifying trade dispute with China. Last week, it effectively banned Huawei from importing U.S. technology,
a decision that forced several American companies, including Google, to partly sever their relationships with the Chinese handset and telecom provider.Now, in an
unpublished draft of a
note in the Federal Register, the Department of Commerce and its Bureau of Industry and Security announced that Huawei would receive a "90-day temporary general license" to continue to use U.S. technology that it already has a license to. New technology and mobile phone models requiring new licenses would still need to apply for them - and those licenses are unlikely to be approved,
according to Reuters.
Reasons for the drawback are unclear. One answer might be
the impact on American jobs. The Information Technology and Innovation Foundation, a tech industry-backed research group, argued in a
new report today that export controls
could cost up to $56.3 billion in damage to the U.S. economy and up to 74,000 jobs, depending on their scale. Obviously, the tech industry is mostly opposed to new tariffs or export controls, and the Trump administration has made American jobs a centerpiece of its domestic policy agenda.
The other answer might be that China is now fulminating against the actions and
subtly threatening access to rare earth materials. President Xi Jinping toured a rare earths facility this weekend, in what was perceived by political analysts as a subtle reminder of China's outsized role in rare earths exports,
in which it is the world's largest.
Regardless, the new temporary reprieve won't do much to change the underlying trade calculus, but it may afford Huawei a little breathing space to figure out what it should do next without U.S. technology.
Comment: Perhaps because of
waivers like these - as have occurred repeatedly in the US' sanctioning of the world and that show just how weak its position is - Huawei has stated quite openly it's not so
concerned about the blacklisting:
Huawei's 5G 'will absolutely not be affected' by US blacklist, founder says
Huawei isn't going away just because the US government has tried to ban it from its markets, company founder Ren Zhengfei has said, declaring that the Trump administration "underestimates our strength."
"Huawei's 5G will absolutely not be affected" by the Commerce Department's ban on selling or transferring US technology to the company, Ren told Chinese state media. "In terms of 5G technologies, others won't be able to catch up with Huawei in two or three years."
The 90-day grace period before Huawei is officially blacklisted from doing business with US companies does not have much impact on the company, Ren claimed, adding: "We are ready."
A Huawei spokesperson assured reporters that nothing would change for US residents with Huawei devices, or even those planning to buy a device in the future - possibly because the Chinese firm is already in talks with Google on how to manage the ban.
Huawei has bracing for such a ban after the company watched fellow Chinese telecom ZTE struggle with a similar blacklisting maneuver last year. Unable to do business with US firms and unable to fill the equipment void itself, ZTE closed its doors for four months, throwing itself on the mercy of the US government and reopening its business more than $1 billion poorer. Not so for Huawei: not only has it been developing its own mobile operating system since 2012 to break dependence on Google's Android, but it already makes half the chips used in its devices.
"We cannot be isolated from the world," Ren boasted, adding that while Huawei was at odds with the US government, it was not the enemy of US companies.
While Trump's emergency order last week did not mention China or Huawei by name, it clearly targets both, giving the Secretary of Commerce the right to block any activity posing an "unacceptable risk to the national security of the United States or the security and safety of United States persons." The Commerce Department then moved to blacklist Huawei and 68 related companies from doing business with US firms.
The US has tried to convince its allies that Huawei is an unconscionable security risk, feeding information directly to the Chinese government through backdoors in its equipment. For its part, Huawei has accused the US of discrimination, claiming American telecoms cannot handle competition and pointing out the US' own record of backdooring allies' communications. Washington's efforts to convince the EU and its member nations to bar Huawei from their 5G networks have failed so far - although Australia has agreed to adopt such a ban.
The battle over Huawei reflects the ongoing trade war between the US and China. Both countries have slapped additional tariffs onto the other's exports after trade talks fell apart earlier this month, and Trump has threatened to dramatically expand the categories of goods taxed this summer.
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And check out SOTT radio's:
Objective:Health #15 - The Dangers of 5G & WiFi - With Scott Ogrin of Scottie's Tech.Info
Comment: Perhaps because of waivers like these - as have occurred repeatedly in the US' sanctioning of the world and that show just how weak its position is - Huawei has stated quite openly it's not so concerned about the blacklisting: See also: