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US extends limited reprieve on tech sales to China’s Huawei

The Trump administration has extended a limited reprieve on U.S. technology sales to Huawei, even as questions remain over how much of an effect broader sanctions are having on the Chinese technology giant.

Huawei has become enmeshed in the trade war between Washington and Beijing, with President Donald Trump showing a willingness to use the sanctions as a bargaining chip. The U.S. government blacklisted Huawei in May, deeming it a national security risk, meaning U.S. firms aren’t allow to sell the company technology without government approval.

At the time, the U.S. exempted a narrow list of products and services. That exemption would have expired Monday, but the Commerce Department extended it for another 90 days, as expected.

Commerce Secretary Wilbur Ross said the main aim of Monday’s announcement is to give smaller U.S. internet and wireless companies that rely on Huawei more time to transition away from reliance on its products.

“Some of the rural companies are dependent on Huawei, so we’re giving them a little more time to wean themselves off,” Ross said in an interview with Fox Business Network.

Other exports to Huawei officially remain restricted, though it’s not clear how much is in practice. Those sanctions, for instance, don’t bar U.S. telecom companies from buying Huawei equipment. And U.S. semiconductor companies that supply Huawei have determined that the export sanctions don’t apply to a significant portion of their sales.

“Most of the ongoing shipments of U.S. semiconductors to China are not covered,” said Paul Triolo, an analyst with the Eurasia Group global risk assessment firm.

The greater effect appears to be on Google’s Android mobile operating system, which Huawei can no longer use in its smartphones. Huawei has developed its own operating system as a replacement, though executives say they still hope to be able to keep using Android.

Huawei released a statement saying Monday’s extension “does not change the fact that Huawei has been treated unjustly.” The company said the extension “won’t have a substantial impact on Huawei’s business either way.”

Huawei is China’s biggest phone maker, and sales to the company account for a significant portion of revenues for some U.S. suppliers.

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