A couple of months ago, in June, after successful talks with Chinese President Xi Jinping at G20 Summit in Japan, the US President Donald Trump allowed the American firms to keep doing business with Huawei.
When the US Bureau of Industry and Security (BIS) put Huawei on its "entity list", thus prohibiting US companies and any others that want to stay in the US's good books from doing business with it, there were a number of stated reasons for doing so.
With this extension, the Chinese tech giant can still buy supplies from US companies and service their existing customers. "Some of the rural companies are dependent on Huawei".
Ross said "As we continue to urge consumers to transition away from Huawei's products, we recognize that more time is necessary to prevent any disruption".
He said some of Huawei's very specific divisions may be eligible for special treatment.
The announcement Monday came one day after President Trump suggested that Huawei was unlikely to receive another extension, pushing back against news reports about an expected reprieve. Regardless of that, it is quite clear that it is going to take some time before we are able to see the conclusion of the saga between Huawei and the U.S government.
Ross announced that another 46 Huawei affiliates are being added to the list of banned companies, meaning over 100 are now subject to the restrictions. The new deadline will be November 19, the Commerce Department said in the statement.
Despite Trump's statement that "I don't want to do business at all because it is a national security threat" the administration on Friday (Aug. 16) agreed to extend a "general temporary license" to Huawei for 90 days. Commerce Secretary Wilbur Ross had also confirmed late last month he had received more than 50 applications, and that he expected to receive more.
Of US$70-billion that Huawei spent buying components in 2018, about US$11-billion went to USA companies. 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. The extension was just announced, which means Huawei has ample time to launch two of its most important products of the year, including the Mate 30 Pro and Mate X foldable. The president didn't clarify whether another 90-day extension would be granted to the company.