The US government has temporarily relaxed some of the trade restrictions it imposed last week on China's Huawei, a move designed to reduce the disruption of operations of the current network and its equipment around the world, Reuters has reported.
The US Department of Commerce will allow Huawei Technologies to purchase US-made materials to maintain existing networks and update software on Huawei devices.
The company is still barred from buying US parts and components to manufacture new products without obtaining licence approvals that are likely to be rejected.
The US government said it had imposed restrictions on Huawei's involvement in activities contrary to national security or foreign policy interests.
US Commerce Secretary Wilbur Ross said in a statement that the new mandate was aimed at giving telecom companies that rely on Huawei equipment time to make other arrangements.
"In short, this licence will allow operations to continue for existing Huawei mobile phone users and rural broadband networks," Ross added.
The licence, which will last until August 19th, indicates that changes to the Huawei supply network could have immediate, long-term and unintended consequences for the company's customers.
"The goal seems to be to prevent internet, computer and cell phone systems from crashing," said Washington lawyer Kevin Wolf, a former Commerce Department official. "This is not a capitulation. This is housekeeping."
In Beijing, Ren Zheng, founder of Huawei, said in an interview with Chinese state television on Tuesday May 21st that the US government's decision to temporarily ease trade restrictions had little effect because the Chinese company had made preparations.
"The fifth generation of Huawei products will not be affected and expect no one to catch up with the company's fifth generation technology in the next two or three years," he said, adding that the US government is aware of Huawei's capabilities.
Huawei is the world's largest communications equipment manufacturer.
The US Commerce Department said it would assess whether it would extend the exemptions after 90 days.
The ministry on Thursday added Huawei and 68 other entities to the list of banned companies, making it nearly impossible for the company to buy any products made in the United States.
The US government linked Huawei's addition to the "list of entities" and an unclaimed lawsuit, accusing the company of involvement in bank fraud for US products and services banned in Iran and transferring funds abroad through the international banking system. Huawei has pleaded not guilty.
Reuters reported on Friday, quoting a government spokeswoman, that the ministry was considering reducing sanctions on Huawei.
The interim licence also allows disclosure of security vulnerabilities and allows Huawei to participate in the development of the rules for the next generation 5 networks.
A report released on Monday found that the potential impact of severe export restrictions on technology could inflict losses on US companies of up to $56.3 billion in export earnings over five years.
According to the IT and Innovation Foundation, missed opportunities also threaten up to 74,000 jobs.