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US tech firms to influence decision on Huawei license extension: IDC

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A Huawei logo is pictured at their store at Vina del Mar, Chile July 18, 2019.

Rodrigo Garrido | Reuters

U.S. President Donald Trump is set to decide Monday on whether to extend a temporary agreement allowing Huawei to do business in the U.S. — and Washington’s decision will likely be influenced by American tech firms, according to research firm International Data Corporation.

The U.S. Commerce Department placed the Chinese tech giant on a blacklist — the so-called Entity List — in May, preventing American companies from selling or transferring technology to Huawei unless they were granted a special license. Days later, the U.S. government eased some of those restrictions for 90 days. That temporary reprieve is set to end on Monday.

According to Reuters and the Wall Street Journal, the U.S. is going to extend the license by another 90 days that will allow Huawei to continue buying parts from American companies.

“This is about, in my opinion, as much about the pressure that U.S. components suppliers are exerting on the government as opposed to say punishing Huawei,” Crawford Del Prete, president at IDC, told CNBC’s “Squawk Box ” on Monday.

Del Prete explained that Huawei’s core product lines — including telecommunications equipment, servers, storage, networking gear and even its smartphones — have “very, very complex supply chains and they rely on technology that has a very, very long lead time.” There are no near-term alternative ways for Huawei to access those advanced technologies without buying them from American companies, Del Prete said.

Ahead of the deadline, Trump told reporters on Sunday that Huawei was a national security threat. “We’ll see what happens. I’m making a decision tomorrow,” Trump said about the possible license extension.

Race for 5G

After Trump met with Chinese President Xi Jinping at the G-20 summit in June, the two leaders agreed at the time to pause the trade war and restart negotiations. Trump also said at the meeting he will allow U.S. companies to keep selling products to Huawei.

Huawei is considered one of the leading names in the race to develop the nascent 5G technology — the next generation of high-speed mobile internet that’s expected to be a major factor in the tech industry for years to come. But the company has been facing mounting concerns that its technology could enable China to spy on others through those high-speed mobile networks.

“I’m not in a position to say whether they are a threat or not, but I think the onus is on Huawei to be able to say … ‘No we’re not a threat to security,'” Del Prete said.

For its part, Huawei has repeatedly denied that its products represent any risk.

Huawei has been dragged into the trade dispute between the United States and China as both countries race for 5G supremacy.

US-China trade fight

Earlier this month, Trump announced the U.S would put a 10% levy on additional $300 billion in goods imported from China starting Sept. 1. Some of those tariffs were subsequently delayed until Dec. 15 to avoid hitting the holiday shopping period.

“I think what the U.S. government is trying to avoid is the consumer feeling this in a significant way,” Del Prete said.

He explained those tariffs would have a direct impact by raising import costs and increasing average selling price of affected goods. Companies, he said, could struggle to meet seasonal demand for products if the levies disrupt their supply chain. That would leave American consumers dissatisfied if they couldn’t buy laptops, phones and other affected items because they were unavailable.

“So, the impact, we think, of extending these tariffs is really to make sure we have a robust Fall buying season,” Del Prete said. “That December 15 date is not by accident, in terms of being able to make sure that the component supply chain is flushed through and the consumers can have access to their products.”

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US warnings about China are lies, Foreign Minister Wang says

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Chinese Foreign Minister Wang Yi makes a speech during the 56th Munich Security Conference at Bayerischer Hof Hotel in Munich, Germany on February 15, 2020.

Abdulhamid Hosbas | Anadolu Agency via Getty Images

MUNICH — China’s Foreign Minister Wang Yi said Saturday that U.S. criticisms of Beijing were “lies” and blamed Washington for the tumultuous relationship between the world’s two largest economies.

“The root cause of all these problems and issues is that the U.S. does not want to see rapid development and rejuvenation of China, still less would they want to accept the success of a socialist country, but that is not fair, China has the right to develop,” Wang said during a discussion at the Munich Security Conference.

“China’s drive towards modernization is an inevitable trend of history and will not be held back or stopped by any force in the world because it represents the direction of human progress,” he added.

Wang’s comments at the Munich Security Conference followed those of Secretary of State Mike Pompeo and Secretary of Defense Mark Esper, both delivering back-to-back speeches accusing China of malign activities.

“China encroaches on the exclusive economic zones of Vietnam, the Philippines, and Indonesia. And on that point, China has had a border or maritime dispute with nearly every nation bordering it,” Pompeo told an audience at the security forum. “And let’s talk for a second about the other realm, cybersecurity. Huawei and other Chinese state-backed tech companies are Trojan horses for Chinese intelligence,” he added.

Esper said Beijing was caring out a “nefarious strategy” through telecommunications firm Huawei. “It is essential that we as an international community wake up to the challenges presented by Chinese manipulation of the long-standing international rules-based order,” he warned.

Secretary of Defense Mark Esper speaks at Munich Security Conference on February 15, 2020.

Munich Security Conference | Kuhlmann

When asked about the speeches made by Pompeo and Esper, Wang dismissed U.S. criticisms and said that Beijing would continue to seek a better relationship with Washington.

“This has become a common scenario, they say basically the same thing everywhere they go about China, and I don’t want to waste our time responding to each and every thing they’ve said. The thing I want to say is that all these accusations against China are lies and not based on facts,” Wang said of Pompeo and Esper’s comments.

“The most important task for China and the U.S. is to sit down together, have a serious dialogue and find a way for two major countries with different social systems to live in harmony and interact in peace. China is ready and we hope the U.S. will work with us in the same direction,” he added.

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Coronavirus live updates: Taiwan confirms first death

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Excited passengers disembark from the MS Westerdam, which is now docked in Sihanoukville, Cambodia. The cruise ship arrived in Cambodia on February 14, 2020 after being stranded for two weeks

Paula Bronstein | Getty Images

This is a live blog. Please check back for updates.

All times below are in U.S. Eastern Standard Time.

China’s National Health Commission reported that there were 2,009 new confirmed cases of the coronavirus and 142 additional deaths as of Feb. 15. The total number of cases in mainland China has reached 68,500, and the total deaths has reached 1,665, according the latest statistics from the commission on Sunday.

6:21 am: Taiwan confirms death of man with no known history of travel to China

Taiwan said a man in his 60s with a history of hepatitis B and diabetes has died of the virus. It’s the first death on the island. The man died Saturday after nearly two weeks in a hospital, but does not have a known history of traveling to China.

Health officials are investigating how he became infected. Taiwan has 20 confirmed cases of the virus.

3:40 am: American from cruise ship tests positive for second time in Malaysia

An 83-year-old American woman who was previously aboard the MS Westerdam cruise ship in Cambodia last week has tested positive for the virus a second time since flying back to Malaysia, officials there said on Sunday. She was one of 2,257 passengers and crew onboard at sea for nearly 14 days, and the first to test positive for the virus.

Officials said that more than 140 of the passengers on the ship traveled through Malaysia’s Kuala Lumpur airport, and all but eight traveled on to destinations in the U.S., Europe and Australia.

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Libya arms embargo a ‘joke,’ says UN official

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A fighter loyal to Libya’s U.N.-backed government (GNA) gestures during a clash with forces loyal to Khalifa Haftar at the outskirts of Tripoli, Libya May 21, 2019.

REUTERS | Goran Tomasevic

Violations of an arms embargo in Libya have become a joke and it is imperative that those who breach it are held to account, a senior U.N. official said on Sunday.

“The arms embargo has become a become a joke, we all really need to step up here,” U.N. Deputy Special Representative to Libya Stephanie Williams told a news conference in Munich.

“It’s complicated because there are violations by land, sea and air, but it needs to be monitored and there needs to be accountability.”

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