US says it may scale back some Huawei trade restrictions

Huawei Mate Book launch in question amid escalating US-China trade war

Ren said Huawei would continue to develop its own components to reduce its dependence on outside suppliers.

Trump later reversed the decision and in return, ZTE had to pay a $1 billion fine and accept monitoring by the US Commerce Department.

The U.S. ban on Huawei comes amid concerns over the company's links to the Chinese state.

Huawei was founded in 1988 by Ren Zhengfei, 74, who had served in the Chinese military before becoming a businessman.

In late 2017, a similar USA ban on another Chinese telecom firm, ZTE, almost forced the company out of business before the payment of huge fines saw the prohibition lifted. She says many industry insiders didn't think the Trump administration would actually go through with these restrictions due to their impact on US companies like Qualcomm and Intel that provide Huawei with critical components, such as computer chips, worth billions of dollars every year.

On Weibo, China's version of Twitter, users reacted to US pressure on Huawei by rejecting Apple products after US President Donald Trump signed an executive order Wednesday banning US telecom companies from installing foreign equipment that poses a national security threat and a separate order banning Huawei from buying US technology without government approval.

Huawei confirmed authenticity of the letter seen by Reuters and published by Chinese media on Friday.

"China has emphasized many times that the concept of national security should not be abused, and that it should not be used as a tool for trade protectionism", Gao Feng, spokesman at the Chinese commerce ministry, told reporters.

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"Assuming the USA export ban on Huawei remains unresolved for the next 12-24 months, we highly doubt if China would stick to its timetable of building 5G aggressively", the USA brokerage wrote.

This suspension means Huawei will lose access to updating the Android operating system on its phones soon. The lasers Huawei uses to send light signals through the fiber-optic cables in Huawei's gear are sourced from US companies like NeoPhotonics, Lumentum, and Finisar.

"It is expected that Huawei's growth may slow, but only slightly", Ren said in his first official comments after the USA restrictions, adding that the company's annual revenue growth might undershoot 20%.

The source told Reuters that Google is still evaluating details of the suspension.

Huawei, the world's biggest telecoms equipment maker, said that losing access to USA suppliers "will do significant economic harm to the American companies" and affect "tens of thousands of American jobs".

"This is so much broader than Huawei and 5G". And even 40 percent of its Chinese suppliers use US technology for their production.

The White House ban also disrupts the global supply chain, because foreign companies can't sell products containing United States parts and components to Huawei either, according to Lawrence Ward, a partner at worldwide law firm Dorsey & Whitney.

Huawei will however seek immediate remedies to resolve the matter, and endeavor to mitigate the impacts of the US government's move. Mike Demler, a senior analyst with The Linley Group, points out that software from those two companies allow HiSilicon to test chip designs before testing on silicon.


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