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US Extends Purchase Rights for China's Huawei

Huawei's mobile phones are displayed at a telecoms service shop in Hong Kong, March 29, 2019.

The U.S. on Monday gave Chinese telecommunications giant Huawei another 90 days to buy supplies it needs from U.S. companies to build its electronic products, for the moment brushing aside concerns that Huawei was a U.S. national security risk.

Commerce Secretary Wilbur Ross told the Fox Business Network that the reprieve for Huawei would help U.S. customers, many of whom operate networks in rural America. Huawei spent $70 billion on component purchases in 2018, $11 billion of it from U.S. companies.

"We're giving them a little more time to wean themselves off" sales to Huawei, Ross said.

At the same time as granting the delay in ending sales to Huawei, the world's largest telecommunications equipment maker, Ross added 46 Huawei affiliates to the Entity List, an economic blacklist covering restrictions on U.S. transactions with the Huawei-related ventures.

The 90-day extension on U.S. sales to Huawei extends to Nov. 19, giving it the ability to maintain existing telecommunication networks and offer software updates for electronic products it has already sold.

Ross dismissed concerns about what happens in three months, saying, "Everybody has had plenty of notice of it. There have been plenty of discussions" with President Donald Trump.

The U.S. first blocked Huawei from U.S. purchases earlier this year, part of the lengthy and so far unsuccessful trade negotiations between the U.S. and China, the world's two biggest economies. But Trump, after an appeal from Chinese President Xi Jinping, eased the sanctions against Huawei, allowing continued limited sales.

Huawei is still blocked from buying American parts for new products without special U.S. licenses. Ross said more than 50 companies have sought waivers to sell to Huawei, but none has been granted.

The U.S. has claimed that Huawei's smartphones and network equipment could be used to spy on Americans, an allegation the company has rejected.

"Technically, Huawei says they're a privately owned company, " Ross said, "but under Chinese law, even private companies are required to cooperate with the military and with the Chinese intelligence agencies, and they're also required not to disclose that they are doing so."

Even as his administration granted the reprieve on Huawei transactions, Trump said Sunday, "I don't want to do business at all, because it is a national security threat."

The U.S. has also alleged that Huawei is linked to foreign policy risks for the U.S.

As part of the blacklist designation against Huawei, the U.S. cited a pending federal criminal case accusing Huawei of violating the U.S. prohibition against business transactions with Iran. Huawei has pleaded not guilty in the case.