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Technology White House budget office pushes for delay of Huawei ban

The acting budget chief for the White House has called for a two-year delay of part of a federal measure that is aimed at Huawei Technologies Co. Ltd., the Chinese telecom giant.

The measure targeting Huawei was included in the National Defense Authorization Act for the current fiscal year and bars government agencies from contracting with Huawei or with companies that use its equipment.

Russell Vought, acting director of the Office of Management and Budget, said enacting the ban within one year, as planned, would cause too much burden for U.S. companies. He also sought to delay a rule prohibiting federal grant and loan recipients from using Huawei equipment, an action that particularly hits rural telecommunications providers.

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“This is about ensuring that companies who do business with the U.S. government or receive federal grants and loans have time to extricate themselves from doing business with Huawei and other Chinese tech companies” that are covered by the law, said Jacob Wood, a spokesman for the budget office.

U.S. companies have lobbied against the Trump administration’s multiple actions against Huawei. The company, which is based in Shenzhen and is the world’s largest telecommunications provider, is in the crosshairs of the White House’s economic and trade battles against China.

Huawei builds wireless networks and supplies handsets to 170 countries and is viewed widely by the Trump administration as a threat to the United States’ technology leadership and to national security.

Huawei has denied that its technology is used for surveillance. In recent weeks, the Chinese government has fought back, warning U.S. tech companies of dire consequences if they comply with the United States’ ban.

But since the actions, the tech sector has complained that it is unrealistic to fully ban companies from doing business with Huawei because the telecommunications supply chain is intertwined with equipment from companies in multiple countries.

“While the administration recognizes the importance of these prohibitions to national security, a number of agencies have heard significant concerns from a wide range of potentially impacted stakeholders who would be affected,” Mr. Vought wrote in a letter last week to Vice-President Mike Pence and several members of Congress. The Wall Street Journal first reported on the letter.

Mr. Vought asked in the letter to delay the order for two years, allowing companies that sell parts to Huawei and companies that rely on government grants to respond with comments. If the delay is approved, the ban would take effect in three years.

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The request applies to just one piece of the administration’s battle against Huawei. But if approved by Congress, it would be a relief to the telecom giant.

Huawei did not immediately respond to a request for comment.

Last year, the Trump administration also issued an order that bans federal agencies from directly purchasing from Huawei and other Chinese companies. Last month, the U.S. Commerce Department put Huawei on a blacklist that prohibits U.S. companies from selling equipment to Huawei. The move was a major blow to Huawei, which relies on chips, software and other equipment from the United States.

The President and American authorities have sounded alarm over a national-security threat posed by Huawei. Administration officials have accused the company of using its networks and equipment for surveillance and to steal valuable trade secrets.

“This will prevent American technology from being used by foreign-owned entities in ways that potentially undermine U.S. national security or foreign-policy interests,” the U.S. Secretary of Commerce, Wilbur Ross, said last month when announcing that Huawei was on the blacklist.

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