NEW YORK, May 21 (Reuters): The United States (US) has temporarily eased trade restrictions on China's Huawei to minimise 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 US action.
The US Commerce Department blocked Huawei Technologies Co Ltd from buying US goods last week, saying the firm was involved in activities contrary to national security.
The move came amid an escalating dispute over trade practices between the United States and China. The two countries increased import tariffs on each other's goods over the past two weeks after US President Donald Trump said China had reneged on earlier commitments made during months of negotiations.
On Monday, the Commerce Department granted Huawei a license buy US goods until Aug. 19 to maintain existing telecoms networks and provide software updates to Huawei smartphones.
The Chinese company is still prohibited from buying American-made hardware and software to make new products without further, hard-to-obtain licenses.
The reprieve is intended to give telecom operators that rely on Huawei equipment time to make other arrangements, US Secretary of Commerce Wilbur Ross said in a statement on Monday.
"In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks," Ross said.
Huawei founder Ren Zhengfei on Tuesday said in a series of interviews with Chinese state media that the reprieve bore little meaning for the telecom gear maker as it had been making preparations for such a scenario.
"The US government's actions at the moment underestimate our capabilities," Ren said in an interview with CCTV, according to a transcript published by the Chinese state broadcaster.
The temporary license suggests changes to Huawei's supply chain may have immediate, far-reaching and unintended consequences for its customers.
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