US places severe sanctions on Huawei
WASHINGTON: The Trump Administration hit Chinese telecom giant Huawei with severe sanctions yesterday, adding another incendiary element to the USChina 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.
Shares in Huawei suppliers in China skidded on the news as markets opened in Asia, with Luxshare Precision Industry down as much as 6.1%.
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 titfortat tariffs between the world’s two largest economies and a selloff on global stock markets.
On Wednesday, Mr 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 G20 summit in Japan next month.
Mr 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 Mr Trump, are worried.
The US Department of Agriculture had paid $US8.52 billion ($NZ13 billion) directly to farmers as part of a 2018 aid programme designed to offset losses from tariffs imposed by China and other trading partners, a spokesman for the agency said yesterday.
The Trump Administration had pledged up to $US12 billion in aid to help offset losses resulting from Chinese tariffs.
Mr 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.
US Commerce Secretary Wilbur Ross said in a statement Mr Trump backed the decision to ‘‘prevent American technology from being used by foreignowned entities in ways that potentially undermine US national security or foreign policy interests’’.
Mr Trump earlier in the day 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 nextgeneration 5G networks.
Huawei, which denies its products pose a security threat, said it was ‘‘ready and willing to engage with the US Government to come up with effective measures to ensure product security’’.