Exclusive: U.S. may scale back Huawei trade restrictions to help existing customers

(Corrects title in 17th paragraph of this May 17 story to say “Chief Financial Officer” Meng Wanzhou, not “Chief Executive Officer”.)

FILE PHOTO: A woman looks at her phone as she walks past a Huawei shop in Beijing, China May 16, 2019. REUTERS/Thomas Peter/File Photo

By Karen Freifeld

(Reuters) – The U.S. Commerce Department said on Friday it may soon scale back restrictions on Huawei Technologies after this week’s blacklisting would have made it nearly impossible for the Chinese company to service its existing customers.

The Commerce Department, which had effectively halted Huawei’s ability to buy American-made parts and components, is considering issuing a temporary general license to “prevent the interruption of existing network operations and equipment,” a spokeswoman said.

Potential beneficiaries of the license could, for example, include internet access and mobile phone service providers in thinly populated places such as Wyoming and eastern Oregon that purchased network equipment from Huawei in recent years.

In effect, the Commerce Department would allow Huawei to purchase U.S. goods so it can help existing customers maintain the reliability of networks and equipment, but the Chinese firm still would not be allowed to buy American parts and components to manufacture new products.

The potential rule roll back suggests changes to Huawei’s supply chain may have immediate, far-reaching and unintended consequences.

The blacklisting, officially known as placing Huawei on the Commerce Department’s entity list, was one or two efforts by the Trump administration this week allegedly made in an attempt to thwart national security risks. In an executive order, President Donald Trump also effectively

Keep reading this article on Reuters Business.

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