SAN FRANCISCO – The US government announced on Monday a new 90-day extension to allow China’s Huawei Technologies Co. Ltd. to continue doing business with US firms as regulators in Washington continue to draft rules and regulations for telecommunications firms that are deemed to pose risks to national security.
The latest extension, which will expire in February 2020, is for the same 90-day period as the one announced in August, and this is the third time that Washington has postponed its decision to prohibit US firms from doing business with Huawei after the turmoil caused in the tech sector when the move was first announced in May.
Although Huawei’s market share for mobile telephones in the US is very small – less than 1 percent, according to the most recent figures compiled by Statcounter – the Chinese firm has a strong presence as a provider of telecom equipment in rural areas.
Its products, which are substantially cheaper than those of its competitors, have allowed the establishment of wide wireless networks in sparsely populated parts of the country, where – if not for Huawei – such networks would have been practically unsustainable from a cost perspective.
“The Temporary General License extension will allow carriers to continue to service customers in some of the most remote areas of the United States who would otherwise be left in the dark,” said Commerce Secretary Wilbur Ross in a statement.
“The Department will continue to rigorously monitor sensitive technology exports to ensure that our innovations are not harnessed by those who would threaten our national security,” he added.
Along with its presence in rural areas, the other key element in understanding Huawei’s effect on the economy are the providers of technological components and software, including chipmakers Intel, Xilinx and Broadcom, along with Internet giant Google, the owner of the Android operating system, which is installed on Huawei devices.
Of all the US providers to Huawei, Google is the one with the highest profile, given that the telephones the Chinese firm sells around the world (and which are especially popular in the Latin American and European markets) include Android pre-installed and services such as Chrome, Gmail, Google Maps, YouTube and the applications store Google Play.
The veto on Huawei business comes within the context of the trade war between the US and China, which has been under way almost since the time Donald Trump took office in January 2017 and which, so far, has included US tariffs on hundreds of millions of dollars of Chinese imports to the US and similar reprisals on certain US products by Beijing.