Earlier this year in May, the US President banned Chinese giant Huawei from doing business with any of the US-based companies. However, soon after that, Huawei was granted a 90-day reprieve so that it can maintain existing networks and deliver software updates for existing Huawei devices.
However, during that time, the company was restricted from placing new orders for parts and components from the US firms to build new devices without seeking license approvals. Now, the grace period offered by the US is expiring today.
But a new report coming from Reuters claims that the US Commerce Department is expected to extend the trade license for another three months. And hopefully, in this time the United States and China will manage to reach an agreement over the ongoing trade disputes.
Huawei is currently held as a bargaining chip by the United States in the talks between the two economic superpowers. However, Donald Trump and Xi Jinping are expected to discuss the future of the company later this week.
In June, Donald Trump had confirmed that US companies can continue selling to Huawei, the Chinese tech giant, as long as the sales did not involve equipment that threatens US national security. But nothing much has been done in this matter till now.
According to Commerce Secretary Wilbur Ross, more than 50 companies have applied special licenses to distribute to Huawei in the past three months. Out of $70 billion that Huawei spent for components in 2018, around $11 billion went to US companies like Qualcomm, Intel, and Micron.
Banning Huawei from doing business with the US-based companies also has a greater impact on the economics of the US-based firms. Even though the United States remove the ban, it seems that the damage is already done.
Since the past few months, Huawei has been actively coming up with new plans and strategies to reduce its reliance on the United States for its products. Also, the company has launched HarmonyOS, it’s own homegrown operating system that can be used as an Android alternative if needed.