US unlikely to renew exemption for American Huawei suppliers

The U.S. probably won’t renew a temporary waiver that lets American companies do business with telecommunications giant Huawei Technologies Co. as Washington cracks down on Chinese companies.

The government also isn’t ruling out additional punishments for allies that refuse to ban Huawei equipment in 5G networks, in addition to potentially cutting them off from intelligence-sharing agreements, Rob Strayer, the State Department’s deputy assistant secretary for cyber policy, said at a briefing with reporters in Brussels on Thursday. He didn’t specify what those repercussions might be.

Huawei, which builds wireless devices and components for mobile networks, was first blacklisted in May in a move that jeopardized the Chinese company’s supply of everything from semiconductors to the Google apps that run on its smartphones. The U.S. government granted a temporary exemption to provide relief for U.S. companies that relied on Huawei. The 90-day waiver was renewed once, but will run out on Nov. 19.

Such so-called temporary general licenses “don’t often last forever,” Strayer said. They’re designed “to provide some immediate relief and to prevent immediate disruption to the market.”

Trump administration officials have repeatedly stressed that Washington would re-evaluate intelligence sharing with countries that allow Huawei or other Chinese companies to build out their future mobile networks because of concerns the companies could become tools for Beijing’s spies. Huawei and Chinese officials reject the accusations.

The State Department comments come as the European Union is preparing to unveil a bloc-wide assessment of security risks to advanced 5G networks by early October. Member states will need to agree to EU-wide measures by the end of the year, which could include certification requirements, tests or identifying some suppliers as “non-secure.”

While European countries would still have the individual right to ban companies for national security reasons, reaching an EU-wide agreement on any security measures may prove a challenge. In countries like Hungary, which has some of the deepest ties to China in Europe, officials are embracing Huawei “as an important strategic partner,” the country’s finance minister said in April.

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US unlikely to renew exemption for American Huawei suppliers