HUAWEI IN U.S. BLACKLIST
Company, 70 affiliates banned from buying components and tech without govt nod
THE Trump administration hit Chinese telecoms giant Huawei with severe sanctions on Wednesday, adding another incendiary element to the United States and China trade dispute just as Treasury Secretary Steven Mnuchin said he would visit China soon for more talks.
The Commerce Department said it was adding Huawei Technologies Co Ltd and 70 affiliates to its “Entity List” — a move that bans the company from acquiring components and technology from US firms without government approval.
Commerce Secretary Wilbur Ross said in a statement that President Donald Trump backed the decision to “prevent American technology from being used by foreign owned entities in ways that potentially undermine US national security or foreign policy interests”.
Trump earlier signed an executive order barring US companies from using telecommunications equipment made by firms
deemed to pose a national security risk.
While the order did not specifically name any country or company, US officials have previously labelled Huawei a “threat” and lobbied allies not to use Huawei network equipment in next-generation 5G networks.
Huawei, which denies its products pose a security threat, said it was “ready and willing to engage with the US government and come up with effective measures to ensure product security”.
It said restricting Huawei from doing business in the US would “limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment and eventually harming the interests of US companies and consumers.”
Speaking at a US Senate Appropriations sub-committee hearing, Mnuchin characterised two days of high-level talks with Chinese officials, here, last week as constructive.
“My expectation is that we will go to Beijing at some point in the near future to continue those discussions,” he said. “There’s still a lot of work to do.”
Shares in Huawei suppliers in China skidded on the news, with Luxshare Precision Industry down as much as 6.1 per cent. Shares in smaller Chinese Huawei rival ZTE Corp also tumbled.
The Trump administration’s rhetoric towards China had cooled in recent days after another round of tit-for-tat tariffs between the world’s two largest economies and a sell-off on global stock markets.
On Tuesday, Trump denied talks with China had collapsed and sounded an optimistic note about the chance of a deal, saying he had an “extraordinary” relationship with Chinese President Xi Jinping, whom he plans to meet at a Group of 20 summit in Japan next month.
Trump also urged China to buy more US farm products.
US agricultural goods have been targeted by China’s retaliatory tariffs, and American farmers, a key political constituency for Trump, are worried.
The US Department of Agriculture had paid US$8.52 billion (RM35.48 billion) directly to farmers as part of an aid programme last year designed to offset losses from tariffs imposed by China and other trading partners, said a spokesman on Wednesday.
The Trump administration had pledged up to US$12 billion in aid to help offset losses resulting from Chinese tariffs.
Trump, who has embraced protectionism as part of an “America First” agenda, has railed against what many US and European officials and companies describe as China’s unfair trade practices, including forced technology transfers and intellectual property theft.