Overnight, the United States government granted Huawei a further 90-day reprieve from the listing on the Department of Commerce Entity List. Unfortunately, the news for Huawei is not great, as alongside the temporary reprieve, 48 further Huawei subsidiary companies were added to the Entity List.
In announcing the extension of the temporary licence, a government official made clear that the purpose of the extension was not to grant any leniency to Huawei, rather to allow American consumers and business an easier path to migrate from Huawei products to other brands.
Secretary of Commerce Wilbur Ross said that the US Government position was to “continue to urge consumers to transition away from Huawei’s products”. “Simultaneously, we are constantly working at the Department to ensure that any exports to Huawei and its affiliates do not violate the terms of the Entity Listing or Temporary General License.” said Ross.
While the change is unlikely to have any immediate impact on Huawei, the US Government position makes clear that it does not see a quick path to Huawei being removed from entity listing.
For Huawei’s smartphone customers, the impact is not likely to take effect for some time, as the company has already obtained access to the next major version of Android. This means that its plans to launch smartphones over the next few months can continue without any change, and existing customers will continue to receive updates.
This also means, presumably, that Huawei will be able to continue to source components made in the United States, but it is unsure how long that will last. The exemption to the Entity List when granted in May was on the understanding it would allow Huawei a very limited access to the US market to obtain replacement parts and components to service American customers.
The future now for Huawei is much less certain, with the US Government making clear that it’s expectation is that these licences or extensions may not be granted in future.
Huawei has already detailed its plans to continue its consumer businesses without access to American software or components.
However, only time will tell whether it’s development of Harmony OS and other technologies will be sufficient to allow the company’s consumer business to flourish despite an extended trade ban from the United States.
We’ve sought comment from Huawei Australia about developments overnight, and we will update you once we hear further.