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US government blinks again in its trade-deal bluff-fest with Chinese mobe maker Huawei

You'll never get Huawei with it… but here's another 90 days

US government blinks again in its trade-deal bluff-fest with Chinese mobe maker Huawei

The US Commerce Department has granted another "extension" to Huawei, allowing the telecoms company to continue to buy American goods despite being on an "entity list" of banned companies.

The latest extension comes on the day that its previous "temporary general license" was due to expire. The extension will last 90 days and is a repeat of the previous 90-day extension, granted back in May.

"As we continue to urge consumers to transition away from Huawei's products, we recognize that more time is necessary to prevent any disruption," Commerce secretary Wilbur Ross said in a statement.

In response, Huawei said that Commerce's actions "violate the basic principles of free market competition" and that they were "in no one's interests, including US companies."

Huawei has become a focal point of the ongoing Trump Administration trade war with China. US officials have repeatedly claimed the company represents a national security threat. That claim has been challenged by other Western nations however, who have carried out security audits in response from significant pressure from the US government and found no evidence of wrongdoing.

This latest extension adds weight to the argument that Huawei is being used as a bargaining chip in the trade war – something that Huawei addressed head-on in its statement. "It's clear that this decision, made at this particular time, is politically motivated and has nothing to do with national security," the mobe maker said.

Talks aimed at ending the growing trade war between the US and China are expected to continue this week and follow a phone call between US president Donald Trump and Chinese president Xi Jinping last weekend.

Deja vu

This is the second time this month that the Trump Administration has blustered about how it will continue to add pressure to China while at the same time granting "exemptions" to those same measures.

Last week, the US announced it would tack another levy on $300bn of Chinese imports starting September 1 – the fourth such increase in tariffs since the trade war was started by President Trump – but immediately excluded "cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing" until mid-December to prevent American consumers from being hit with higher prices in the lead-up to the holiday season.

On Monday, the fact that Commerce was again delaying a ban on Huawei buying US goods was tucked behind a claim that it was adding "dozens of new Huawei affiliates to the Entity List."

The decision is just the latest in a long series of short-term maneuvers by the US in an effort to force China to agree to new trade terms. But as time goes on and a trade deal remains out of reach, the combination of bluffs and ever increasing tariffs is causing growing economic problems and reducing room for negotiation.

Efforts to paint Huawei as an extension of the Chinese government and a potential spy threat have also become increasingly desperate and transparent, with the Wall Street Journal last week claiming to have seen internal police documents from Uganda that showed Huawei engineers allegedly helping the authorities spy on an opposition politician.

Huawei has attacked that report, sending a letter on Friday to the WSJ calling its article "neither a fair nor a responsible representation of Huawei’s legitimate business activities in these countries."


It claims, without going into details, that it has provided the WSJ with "specific information that a number of the statements in the article about Huawei’s alleged involvement with government cybersecurity forces were demonstrably false."

It also pointed to possible legal action against the WSJ when it argued that "at a minimum, the Journal published these false statements in reckless disregard of their veracity." It called parts of the story "false and defamatory", said that the allegation in the report "damage Huawei’s reputation and business interests across the globe" and promised that it would "defend its conduct and reputation." All of which is lawyer speak for "we believe we have grounds to sue."

Meanwhile, Huawei is engaging in its own bluster, saying that the decision to extend the lack of ban for 90 days "won't have a substantial impact on Huawei's business either way." Last month, Huawei chairman Liang Hua likened the company to a "plane riddled with bullet holes" that keeps on flying.

If Chinese and American trade negotiators don't reach a deal by mid-November, the Commerce Department will have to consider whether to grant a third extension to its ban, and just weeks later decide whether to extend its exemption to consumer goods tariffs. ®

Topic: #huawei
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