President Donald Trump will meet senior security officials over the coming days as his administration debates how to ease pressure on the Chinese company Huawei without alienating US companies or China hawks in his own party.

Mr Trump surprised many in both Washington and Beijing over the weekend when he said he was considering removing the telecommunications equipment maker from the “entity list”, which prevents US companies from selling to Huawei without a licence. The move came as part of a more general truce in the long-running US-China trade war, which saw Mr Trump announce a temporary halt to the escalation in tariffs.

But the president is already finding himself hemmed in by heavy lobbying from US technology companies on one side, who want a significant relaxation of the ban, and many within his own party, who consider Huawei a threat to national security.

One person familiar with the situation said: “The NSC [National Security Council] will be meeting on this as soon as possible, and it is likely to take some time for the administration to figure out how exactly it is going to keep everyone on board here — from Beijing, to US industry, to the China hawks in his own party.”

Mr Trump’s comments over the weekend were a major concession to China, which has insisted that the fate of Huawei should be settled as part of the trade talks between the two countries.

The US argues that Huawei poses a threat to national security because its equipment for 5G superfast broadband networks could be used by Beijing for spying. It has also accused the company of stealing US technology and breaking sanctions against Iran.

Mr Trump said that while other issues relating to the company would be discussed later in the talks, he was planning some kind of immediate concession on the export ban.

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Larry Kudlow, a senior White House economic adviser, later clarified that the Trump administration was not considering a “general amnesty” for Huawei, but rather granting more export licences than it might otherwise have done.

The move delighted many Silicon Valley companies, who sell everything from software to microchips to the Chinese company. But it also caused confusion about how the policy will be drawn up.

John Neuffer, chief executive of the Semiconductor Industry Association, which represents many of the US chipmakers who supply Huawei, said: “We are encouraged the talks are restarting and additional tariffs are on hold and we look forward to getting more detail on the president’s remarks on Huawei.”

Experts say the Trump administration’s most likely route is to extend and possibly expand a 90-day reprieve that it granted to many US companies soon after the ban was enacted. That reprieve grants a general licence to anyone selling equipment or software to existing products, such as allowing Google to update its Android software on Huawei mobile handsets.

Paul Triolo, a technology policy expert at Eurasia Group, said: “There is a lot of confusion about this, but it seems like they are trying to figure out a way to make sure the temporary general licence allows some supply particularly to Huawei’s consumer side.”

Mr Kudlow said officials were looking at exempting chipmakers who sell items that were “widely available from other countries”. Others close to the situation say officials want the ban to target specific “choke points”, items that are crucial to Huawei’s 5G network equipment and for which the company is reliant on US suppliers.

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This is likely to include items such as programmable microchips, which are made by Intel among others — though some companies are urging the administration to exempt even those chips if they are not going to be used in 5G networks. 

One technology executive said: “We assume we will still be blocked from selling 5G-related products since they are sensitive to national security, but other things should be allowed, such as programmable chips which are not for 5G.”

But even with security officials looking to pin down the details in the coming days, some in Congress are looking for ways to stop the president softening his position. Marco Rubio, the Republican senator for Florida, warned over the weekend that removing Huawei from the blacklist would be a “catastrophic mistake”.

Meanwhile, people briefed on the situation say some Democrats and Republicans are teaming up on an amendment to this year’s national defence authorisation act that would prevent Mr Trump from removing Huawei from the blacklist unless its executives are innocent of breaking sanctions or stealing technology.

Such an amendment was previously proposed by Mitt Romney, the Republican senator for Utah, but it failed to clear the Senate. Congressional aides said months of hardline rhetoric from the Trump administration on the threat posed by Huawei had emboldened some in both parties to try again to tie the president’s hands.

Additional reporting by Richard Waters in San Francisco



Via Financial Times