US to grant China’s Huawei temporary reprieve

US to grant China’s Huawei temporary reprieve

The US commerce secretary has said the US will grant Huawei a temporary reprieve on doing business in the US, a day after Donald Trump sparked doubts over whether the Chinese telecoms company would face an immediate ban.

Wilbur Ross said on Monday that Washington will extend a temporary general licence for companies to do business with Huawei for 90 days.

Mr Ross said on television network Fox Business that the US would extend the temporary licence in order to give some rural telecoms companies that are “dependent on Huawei . . . a little more time to wean themselves off.” He said November 19 would be the next critical deadline.

The temporary licence allows companies to export to Huawei if they are selling updates or repairs to existing products. One example of this is Google’s Android operating software, which Google warned it would not be able to update under the terms of the original ban.

“As we continue to urge consumers to transition away from Huawei’s products, we recognise that more time is necessary to prevent any disruption”, Mr Ross said in a statement.

The decision comes just a day after Mr Trump said he does “not want to do business at all” with Huawei. “We’re looking really not to do business with Huawei . . . it’s very difficult to determine what’s coming in, what’s not coming in, it’s still Huawei,” he told reporters.

The decision may be seen in Beijing as an olive branch, with the world’s two largest economies lodged in fraught trade negotiations.

Mr Trump’s comments over the weekend had caused confusion since they appeared to contradict his own chief economic adviser, Larry Kudlow, who had confirmed that the Huawei “licensing process” had been extended for three months before the president spoke.

“I think it’s a good faith action, again, helping American companies who need a couple more months to make adjustments if they can get licences. And this assumes, by the way, no national security sensitivity. So that’s not changing. But we’re giving a break to our own companies for three months,” Mr Kudlow said on NBC.

The US-China trade skirmish has sparked financial market tumult repeatedly in recent weeks as fears grow about the potential toll it could take on the global economy.

Germany’s Bundesbank said on Monday that the country, seen as particularly exposed to trade fluctuations because of its large export sector, may have fallen into a recession in the third quarter. S&P Global, the ratings firm, said last week that “unpredictability on the trade front and deteriorating global backdrop” left its analysts on “high alert” over the outlook for the US economy.

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