Trump Administration Eases Ban On Huawei After Technology Stocks Tumble

Enlarge this image toggle caption Ng Han Guan/AP Ng Han Guan/AP

Updated Tuesday at 3 a.m. ET

Days after blacklisting Chinese technology company Huawei from buying American-made products, the Trump administration is now easing up.

On Monday, the U.S. Commerce Department restored the Shenzhen-based tech giant's ability to maintain its network, which means the company can buy equipment and complete software updates to support those who use Huawei smartphones, according to a 90-day temporary general license issued by federal officials.

"The Temporary General License grants operators time to make other arrangements and the Department space to determine the appropriate long term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services," said U.S. Secretary of Commerce Wilbur Ross. "In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks."

After the Trump administration last week barred American companies from doing business with Huawei, the world's second-largest supplier of smartphones, shares of Google and other technology companies dropped on Wall Street.

Huawei officials warned that being placed on the blacklist created a major problem: Google would no longer allow Huawei's smartphones to use popular smartphone applications, like Gmail and Google Maps.

A Google spokesman told NPR that the Trump administration loosening its restrictions will allow those with Huawei phones to use Google apps.

Analysts said if Huawei remained on the blacklist, Google's stock would have continued to take a beating.

Trump's clampdown on Huawei, which has the support of the Chinese government, comes amid escalating trade tensions with the country and growing concerns that the Chinese government could potentially use Huawei devices to spy on the U.S. and its allies.

Huawei founder Ren Zhengei told Chinese state media that a clash with the U.S. was inevitable, and that it was only a matter of time before Huawei threatened U.S. interests. "We sacrificed [the interests of] individuals and families for the sake of an ideal, to stand at the top of the world," Ren said, according to the South China Morning Post. "For this ideal, there will be conflict with the United States sooner or later."

Ren said the 90-day reprieve from the U.S. government meant little, because the company was prepared for the possibility that it might lose access to American companies. "The current practice of US politicians underestimates our strength," Ren said, the BBC reported.

In March, Richard Yu, CEO of Huawei's consumer products division, told a German newspaper that Huawei had prepared its own operating system in case it lost access to Android. "That's our plan B," Yu said. "But of course we prefer to work with the ecosystems of Google and Microsoft." The company has stockpiled enough chips to keep its phone business running for months, Bloomberg reports.

Google was not the only company that had cut ties with Huawei. American chipmakers such as Intel, Qualcomm and Broadcom told their employees that they would stop supplying Huawei, Bloomberg reported. And the Nikkei Asian Review reported that the German chipmaker Infineon had also stopped shipments to Huawei.

The Trump administration last week announced restrictions that seemed aimed at Huawei. An executive order signed by the president declared a "national emergency" and blocked U.S. companies from doing business with foreign tech companies that pose "an unacceptable risk to the national security of the United States." The Commerce Department said it would add Huawei and its subsidiaries to a list of companies generally prohibited from buying U.S. technology.

Commerce officials say Huawei was added to the blacklist after concluding that the company was engaged in activities "contrary to U.S. national security or foreign policy interests."

Huawei officials have denied those claims.