Google has been granted a 90-day extension to continue with Huawei, easing strict US restrictions on Chinese telecom equipment and telephone manufacturer.
The US Department of Commerce blocked Huawei Technologies from US goods last week, a major escalation in the trade war between & # 39; the world's two top economies, and claimed that the company was involved in activities that violated national security.
The two countries increased import duties on each other's goods in the last two weeks after US President Donald Trump said that China had renounced previous commitments made during months of negotiations.
Monday the Commerce Department granted Huawei a license to purchase US goods until August 19 to maintain existing telecommunication networks and offer software updates for Huawei smartphones, a move designed to give telecom operators dependent on Huawei time to make other arrangements.
Monday, Commerce Department granted Huawei a license to purchase US goods until August 19, allowing Google to continue sending updates to Huawei phones until that time.
Huawei is still forbidden from buying American hardware and software to make new products without further hard-to-obtain licenses.
Huawei founder Ren Zhengfei told Chinese state media on Tuesday that the delay had little significance for the company because it had prepared preparations for such a scenario.
& # 39; The actions of the US government are currently underestimating our options & # 39 ;, said Ren in an interview with CCTV, according to a transcript published by the Chinese state channel.
The American controls & # 39; have no impact within this company & # 39; and none on the development of the next generation telecom technology, Ren said. He said that some low-end companies can be affected.
Chip experts have called on Huawei to claim that it could guarantee a stable supply chain without US assistance because the technology it buys from US companies is & # 39; hard to replace & # 39; would be.
Nearly 16 percent of Huawei's spending on components in 2018 went to American companies, including Qualcomm, Intel and Micron Technology, analysts said.
Huawei founder Ren Zhengfei (shown in the file photo) said on Tuesday that the US controls & # 39; will have no impact within this company & # 39;
Thanks to Monday's temporary license, companies such as Google can continue to offer service and support, including software updates or patches, to Huawei smartphones that were available to the public on or before May 16.
& # 39; Keeping phones up-to-date and safe is in everyone's interest and this temporary license allows us to continue offering software updates and security patches to existing models for the next 90 days & # 39 ;, a spokesperson said from Google CNBC Tuesday in an email.
The license also offers Huawei the opportunity to develop standards for the fifth generation (5G) telecom networks.
US officials say that Huawei and other suppliers of Chinese telecom equipment pose a risk because they are obliged to the ruling Communist Party and act as weapons of Chinese intelligence services. Huawei denies allegations that it facilitates Chinese espionage.
The order from the Trump administration last week increases pressure on Huawei, which Washington says is a security risk and threatens to hamper the sale of network equipment and other products. Huawei is the number 2 global smartphone brand, but relies on Google & # 39; s Android operating system and US component suppliers.
China & # 39; s government reiterated its promise to defend Chinese companies abroad, but did not provide details about what Beijing could do.
Huawei has developed its own chips for some smartphones and other products, but relies on American suppliers for the most advanced components.
Huawei and Google discuss possible & # 39; emergency relief measures & # 39; for her smartphone company, which might lose access to some services of the American company, says Ren. He gave no details.
Google, part of Alphabet Inc., said Monday that the basic services still work on Huawei smartphones that use their Android operating system.
Google did not provide details about which services may be curtailed. But the company could not transfer any hardware or software directly to Huawei. That would affect cards or other services that require the support of the American company.
Huawei only follows Samsung from South Korea in the field of global smartphone sales. According to industry analysts, it can be difficult to compete if it cannot make replacements for Google services that are in violation of the American uprisings.
& # 39; I would say that this impact will be very large, but Google is an exceptionally good company & # 39 ;, Ren said. & # 39; We discuss emergency measures. & # 39;
A Foreign Ministry spokesperson accused Washington of abusing the & # 39; state power & # 39; to hurt foreign companies and to interfere in commercial markets.
"The Chinese government has determination and the ability to protect its legitimate and legitimate rights and interests," said the spokesman Lu Kang.
Apple Inc., Huawei's largest American rival in the field of smartphones, is an important target for Beijing. The company's iPhones are assembled in China and the country is its number 2 market after the United States.
Apple's attack can be politically uncomfortable for Chinese leaders who have accused Washington of mistreating Huawei. Business groups say Chinese officials are trying to reassure American companies, despite the tariff war between Beijing and President Donald Trump. But regulators have a range of tools, including tax and safety inspections that can hinder a company without being officially recognized.
Huawei's sales in the United States collapsed in 2012 after a conference panel told telephone companies that they were the company and the smaller Chinese competitor ZTE Corp. to avoid as security threats.
Nevertheless, the sale of Huawei has grown rapidly elsewhere. The company previously reported that global sales increased 19.5% to 721.2 billion last year. Profit increased by 25.1% to 59.3 billion yuan.
Huawei smartphone shipments rose 50 percent more than a year earlier in the first three months of 2019 to 59.1 million, while the total number of companies in the world was 6.6%, according to IDC. Shipments by Samsung and No. 3 Apple declined.
However, last week's order threatens to disrupt Huawei's global operations by restricting access to components for products sold everywhere, not just on the US market.
It comes into effect after a 90-day grace period, which means some transactions are telecom operators that rely on Huawei equipment for & # 39; critical services & # 39; may allow time to make other arrangements, the US Department of Commerce said Monday in a notification on its website.
Washington has tried to convince American allies to shun Huawei as a supplier of fifth generation technologies. Australia, Taiwan and some other governments have imposed restrictions on the use of Huawei technology, but Germany, France and other countries are still doing business with the company.