Unless Deadline Is Extended, U.S. Firms Must Stop Working With Huawei
DAVID GREENE, HOST:
Chinese tech giant Huawei is blacklisted in the U.S. for national security reasons. But the company has been able to keep doing business with American companies thanks to a temporary reprieve. That reprieve, though, expires today. Several media outlets are reporting that it's going to be extended.
Let's sort this out with NPR's tech correspondent Shannon Bond, who is with us. Hey, Shannon.
SHANNON BOND, BYLINE: Hey, David.
GREENE: Take us back, if you can, just for the beginning here. How did Huawei get in the crosshairs of the U.S. government?
BOND: Well, Huawei is one of the world's biggest makers of smartphones and telecoms equipment. And it relies on a lot of American companies to supply things like processing chips and, in the case of its phones, Google's Android software. But the administration says it's worried that Huawei and other big Chinese company could - companies could be spying for Beijing or stealing intellectual property from American companies. The Pentagon, for example, banned purchases of Huawei phones on military bases last year.
Huawei maintains that the U.S. has given no evidence of spying. But as you said, back in May, the Trump administration put Huawei on this entity list, which means U.S. companies can't sell products to Huawei without government approval.
GREENE: But I mean, is this really about suspicion of spying? Or - I mean, this is not happening in a vacuum. We've got a big trade war between these two countries happening.
BOND: That's right. Huawei's being used for leverage. Back in June, when President Trump met with Chinese President Xi, they agreed to a cease-fire in the trade war while they continued negotiations. And at the same meeting, Trump said some U.S. companies would be able to do business with Huawei while those talks continued...
BOND: ...They're right in the middle of this.
GREENE: So there was that reprieve. How has that played out for U.S. companies, who must be watching this wondering what the result's going to be?
BOND: Right. I mean, so this - I - the reprieve was to help these companies do some work for a limited period of time to minimize disruption - so providing software updates to Huawei phones. And it was particularly aimed at some smaller, rural cellphone and internet providers in the U.S. that rely on Huawei for their networking equipment. Here is Commerce Secretary Wilbur Ross explaining this on Fox Business last week.
(SOUNDBITE OF FOX BUSINESS NETWORK BROADCAST)
WILBUR ROSS: There are enough problems with telephone service in the rural communities. We don't want to knock them out, so one of the main purposes of the temporary general licenses is to let those rural guys continue to operate.
BOND: And as you said at the top, this reprieve has been extended twice already. It expires at the end of the day today. Several other publications are reporting that it'll be extended for a third time, though NPR hasn't confirmed this.
GREENE: But I mean, this is a big deal for American companies - right? - if they get this reprieve extended.
BOND: Well, it would be another temporary extension. And what companies say they really want is to understand how they'll be able to deal with Huawei over the long term. The Trump administration says it's also working towards allowing some businesses to be able to sell to Huawei if they're not in really sensitive national security areas. Huawei says there are 200 companies - chip-makers and others - that want to sell them things. And there are 40,000 jobs in the U.S. that could depend on those decisions.
GREENE: How has Huawei responded to being kind of caught up in all this?
BOND: Yeah. Well, Huawei, as you can imagine, denies all accusations about these national security issues or spying. They think, fundamentally, they've been pulled into a geopolitical fight, you know, with the trade war. And you know, they point to some of these examples, like what Trump has said.
Huawei has made great strides in the meantime in finding alternatives to U.S. chips, even creating its own mobile operating system. It started selling phones in China that don't contain any chips made by U.S. companies. So this U.S. government fight with Huawei may actually be creating a stronger and more independent tech company in China.
GREENE: Oh, interesting. NPR's tech correspondent Shannon Bond with us. Shannon, thanks.
BOND: Thank you.
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