US temporarily loosens restrictions on Huawei products

Washington, May 21 (IANS) The US Commerce Department has announced loosening of some of the restrictions Washington placed on Huawei equipment last week, which made it difficult for American companies to do business with the Chinese tech giant.

Although Huawei does not do much business in the US, the company is the sole provider of networking equipment to many rural American internet providers. Those companies have said it will take time - or may be impossible - to replace their Huawei technology with a rival's, CNN reported.

The department on Monday issued a temporary general license that lets Huawei buy US goods to maintain existing networks and continue providing wireless services.

The company however, is still banned from buying American equipment to make new products.

The license took effect on Monday and lasts for 90 days, at which point it could be extended.

"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," Secretary of Commerce Wilbur Ross said in a statement.

In response to the development, Huawei founder Ren Zhengfei said on Tuesday that the US temporary license didn't "make much sense", reiterating that the company was prepared for disruptions to its supply chain.

"We shall not narrow-mindedly exclude US chips. We shall grow together. But when there is a supply shortage, we have a backup," he said in an interview with Chinese state broadcaster CCTV.

The executive order comes amid an escalating trade war between the US and China.

The US has also publicly asked its allies to steer clear of using Huawei products over concerns that the equipment could be used by the Chinese government to obtain private information.