President Donald Trump’s government is preparing a new extension of its moratorium on banning U.S. companies from doing business with Chinese manufacturer Huawei, while U.S.-China trade talks continue.
The new moratorium would be for six months, twice as long as the one granted in August, and would therefore expire at the end of May 2020, according to U.S. media this weekend and advanced by the newspaper Politico.
If the information is confirmed, the current extension announced on August 19 would expire at midnight next Monday, November 18, when technology providers such as Google, Intel, Xilinx or Broadcom should stop selling to Huawei.
The Department of Commerce and the White House, consulted by Efe, have avoided commenting on the issue.
On the other hand, the president has not referred to Huawei either and has limited himself to pointing out that China will buy again “in large volumes” within the first phase of the attempted trade agreement, which still hangs on signing since negotiations to finalize details continue.
The Trump Administration announced for the first time the ban on US companies from maintaining commercial links with Huawei in May of this year, but since then it has already decreed two moratoriums allowing US firms to continue doing business with the Chinese manufacturer.
The U.S. executive is wary of the company’s links with the Chinese government and claims to have suspicions that Huawei could use its mobile phones and other technological equipment to spy abroad and provide information to the leaders of the Asian country.
Although the market share of Huawei mobile phones in the United States is very small (less than 1% according to the most recent Statcounter data), the Chinese company does have a strong presence as a supplier of telecommunications equipment in the country’s rural areas.
Its products, which are substantially cheaper than those of its competitors, have enabled the deployment of wireless networks in large parts of the sparsely populated country where, had it not been for Huawei, these infrastructures would have been virtually financially unviable.
Along with its presence in rural areas, the other key aspect for understanding Huawei’s impact on the U.S. economy are the suppliers of technology and software components, such as chip manufacturers Intel, Xilinx and Broadcom, and Internet giant Google, owner of the Android operating system, present in Huawei’s devices.
Of all the American providers of Huawei, Google has the highest profile, since the phones that the Chinese manufacturer sells worldwide (and that are especially popular in markets such as Latin America and Europe) have pre-installed Android and services such as Chrome, Gmail, Google Maps, YouTube and the Google Play app store.
The veto to Huawei is framed in a context of trade war between the United States and China, which has been open since practically the moment Trump became President in 2017, and which has been paid for the moment with tariffs on hundreds of millions of Chinese imports to the U.S. and similar reprisals by Beijing.
Trade tensions between the world’s two largest economies have affected global activity, with a particular impact on international supply chains.
Specifically, in October the International Monetary Fund (IMF) lowered growth forecasts for both the US and China for this year and next, as well as global growth prospects in the face of growing uncertainty.