The United States has temporarily eased trade restrictions on China’s Huawei to minimize disruption for its customers, a move the founder of the world’s largest telecoms equipment maker said meant little because it was already prepared for U.S. action.
The U.S. Commerce Department blocked Huawei Technologies from buying U.S. goods last week, a major escalation in the trade war between the world’s two top economies, saying the firm was involved in activities contrary to national security.
The two countries increased import tariffs on each other’s goods over the past two weeks after U.S. President Donald Trump said China had reneged on earlier commitments made during months of negotiations.
On Monday, the Commerce Department granted Huawei a license to buy U.S. goods until Aug. 19 to maintain existing telecoms networks and provide software updates to Huawei smartphones, a move intended to give telecom operators that rely on Huawei time to make other arrangements.
Shares of U.S. suppliers to Huawei including Qualcomm, Intel Corp and Lumentum Holdings Inc rose on Tuesday morning, with the Philadelphia Chip Index up more than 1%.
Radio frequency chipmaker Qorvo was the latest U.S. supplier after mobile parts maker Lumentum to halt shipments to Huawei.
It is unclear what the U.S. government extension permits, but if it allows Huawei to keep purchasing components, the company will likely order more to build inventory, said Mark Kelleher, an analyst at D.A. Davidson.
Huawei is still prohibited from buying American-made hardware and software to make new products without further, hard-to-obtain licenses.
