- The Washington Times - Monday, August 19, 2019

The Commerce Department gave a 90-day reprieve to companies that do business with Huawei, saying Monday that networks need the time to “wean themselves off” the Chinese telecom giant as President Trump battles Beijing over trade and technology.

Secretary Wilbur L. Ross Jr. said the U.S. is adding 46 Huawei affiliates to the “entity list,” meaning they are blacklisted from doing business with American companies — unless those firms get a special license.

But he said U.S. companies will have until mid-November to sever remaining ties. Rural networks, in particular, needed extra time to reorient their supply chains, even as Mr. Trump cracks down in response to fears Huawei could use its 5G equipment to snoop or otherwise threaten national security.

“As we continue to urge consumers to transition away from Huawei’s products, we recognize that more time is necessary to prevent any disruption,” Mr. Ross told Fox Business Network.

He said adding the 46 affiliates to the restriction list will make it tougher for Huawei to avoid the sanctions the U.S. has imposed on the company. The affiliates are located in Australia, Brazil, Mexico, France, India, Britain and a number of other countries.



Huawei, which denies that it is a security threat, slammed the move.

“It’s clear that this decision, made at this particular time, is politically motivated and has nothing to do with national security. These actions violate the basic principles of free market competition. They are in no one’s interests, including U.S. companies,” it said in a statement. “Attempts to suppress Huawei’s business won’t help the United States achieve technological leadership.”

The Commerce Department first blacklisted Huawei in May, though it granted a reprieve until Aug. 19 for certain U.S. companies doing business with the Chinese corporation.

Monday’s announcement is an extension of that reprieve. While the Commerce Department decides which companies should be licensed to continue business with Huawei, Mr. Trump on Sunday signaled he’d like to sever any ties between U.S. government agencies and Huawei.

“I don’t want to do business at all,” he said, “because it is a national security threat.”

The problem, as the Trump administration sees it, is that Chinese law requires private companies to cooperate with the military and Chinese intelligence agencies, prompting fears of foreign surveillance.

Mr. Ross said as 5G becomes commonplace, it’s unclear whether the company will embed its equipment with a nefarious “back door” that could be exploited by China’s communist authorities.

The fight over Huawei has been an ongoing plot in pivotal trade negotiations between U.S. and China. The talks have dragged out over the course of this year and are set to enter a new phase Sept. 1, when the U.S. imposes a 10% tariff on additional Chinese goods.

Klon Kitchen, a senior research fellow at the Heritage Foundation, said the Huawei moves suggest the administration wants U.S. industry to prepare for a long-term confrontation with China, though officials felt companies needed time to “position themselves accordingly.”

Huawei doesn’t have a big footprint in nationwide networks, though it’s worked its way into some local telecommunication systems. Its products are reliable and offered at a competitive price.

Mr. Kitchen said the Commerce Department is signaling it’s intent on “rooting out Huawei from our regional networks.”

“But the government understands that local TELCOs cannot just ‘rip-and-replace’ Huawei equipment overnight or at no cost. This delay allows that process to proceed in a more deliberate and managed way,” he said.

The U.S. has encouraged other nations to isolate Huawei, too. Yet European allies and others are leery about severing ties with the top provider of 5G equipment, fearing the Americans will cut a side deal with the Chinese and leave them in the lurch.

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