Trump wants to extend exposure to US companies selling to Huawei
The Trump administration was ready to offer a new reprieve to US companies selling to Huawei, easing the tension with Beijing following a rapid escalation in the trade war between the countries this month.
According to people familiar with the matter, the US Commerce Department was preparing to extend a temporary general license for companies to do business with Huawei for 90 days, with a notice due Monday. The final details of the extension had not been deleted, so there may be some changes to the announcement that could mean that there is no short renewal of a rug. The Commerce Department declined to comment.
The decision to allow more time for transactions between Huawei and US companies is likely to be interpreted as an olive branch from Washington to Beijing as they try to get trade talks back on track after a couple of weeks' time that plagued the markets and raised concerns. on a global economic downturn.
Donald Trump, the US president, said earlier this month that he would slam a new round of customs duties on Chinese imports from September 1[ads1], and his Treasury Department formally referred to China as a currency manipulator, provoking anger and promises of retaliation on the Chinese side . Meanwhile, the US administration has approved $ 8 billion sales of fighter jets to Taiwan, which risked further shaking Beijing.
Still, Trump has shown signs of worrying about the economic impact of the trade war with China as he heads into the reelection campaign in 2020. Last week he said he would defer the impending imposition of taxes on a major part of Chinese imports until December to protect the Christmas shopping season from its effects. He also softened his rhetoric against China, saying that he would "soon" have a conversation with Xi Jinping, the Chinese president, and he expected the trade war to be "quite short."
The expansion of the deferral on Huawei – first reported by Reuters – is a win for the business community, which has been pushing hard for more flexibility with regard to the Chinese company.
The Trump administration placed Huawei on an export blacklist run by the Commerce Department in May, after a key round of trade talks with China broke out. US officials have accused Huawei of being a threat to national security, breaking US sanctions and being a vehicle for espionage.
But US tech companies, including Google, whose Android operating system is used by Huawei, moved quickly to demand some leeway in handling the ban, arguing that there would otherwise be major disruptions to their business, customers and even American security.
Extending the license is a middle ground between the complete implementation of the ban, as Washington's China hawks argue, letting it lapse completely. Trump has suggested that finding a solution to Huawei could be part of any comprehensive deal with China on trade.
"In many ways, this is kicking down the road, this is not a long-term solution," said Samm Sacks, Cybersecurity Policy and China's Digital Economics Fellow at the New America Foundation. “Many in Washington want to kill the company. Others want to use it as influence. You can't have both, ”she added.
Senior US and Chinese dealers are expected to hold face-to-face talks in Washington in early September in the hope that they will outperform the last one in Shanghai last month, prompting Trump to complain that Beijing was not will not comply with the promises and go to introduce the new tariff. However, there are no set plans for the negotiations next month.
Trump administration officials have linked leniency to Huawei with Chinese purchases of US agricultural products, so trade war observers will closely monitor whether Beijing responds by restarting its US farm products in the coming days.
A three-month extension of the Huawei license would set a new deadline for mid-November, around the time of the Asia-Pacific Summit in Chile, which could give Xi and Trump a new opportunity to meet. During the trade war, the two presidents have used international rallies, including the G20 summit in December last year, and June their G20 summit in Japan, to try to revive the prospects for a deal.
