Huawei logo is displayed at a retail store in Beijing
US companies argue that the ban on dealing with Huawei would cause significant disruption and potentially threaten national security © AFP

Donald Trump has cast doubt on any reprieve for US companies selling to Huawei, saying he does “not want to do business at all” with the Chinese telecoms company.

The US commerce department was expected to extend a temporary general licence for companies to do business with Huawei for 90 days, with an announcement due on Monday.

But on Sunday evening, the US president said: “Huawei is a company we may not do business with at all.”

“We’re looking really not to do business with Huawei . . . it’s very difficult to determine what’s coming in, what’s not coming in, it’s still Huawei,” he told reporters.

“We’ll be making a decision over that in the not too distant future,” he added.

The US president appeared to contradict his own chief economic adviser, Larry Kudlow, who had confirmed that the Huawei “licensing process” had been extended for three months before the president spoke.

“I think it’s a good faith action, again, helping American companies who need a couple more months to make adjustments if they can get licences. And this assumes, by the way, no national security sensitivity. So that’s not changing. But we’re giving a break to our own companies for three month,” he said on NBC.

Any decision to allow more time for transactions between Huawei and US companies would be interpreted as an olive branch from Washington to Beijing, as they attempt to put trade negotiations back on track after a testy few weeks that rattled markets and heightened concerns over a global economic slowdown. 

The commerce department declined to comment. 

Earlier this month Mr Trump said he would slap a new round of tariffs on Chinese imports starting on September 1 and his Treasury department formally labelled China a currency manipulator, eliciting anger and promises of retaliation on the Chinese side. Meanwhile, the US administration has approved an $8bn sale of fighter jets to Taiwan, which risked further irking Beijing. 

Yet Mr Trump has shown signs of fretting over the economic impact of the trade war with China as he heads into the 2020 re-election campaign. Last week he said he would delay the impending imposition of levies on a big chunk of Chinese imports until December to shield the Christmas shopping season from its effects. He also softened his rhetoric towards China, saying he would “soon” have a call with Xi Jinping, the Chinese president, and he expected the trade war to be “fairly short”. 

An extension of the reprieve on Huawei — first reported by Reuters — would be a victory for the business community, which has pushed hard for more flexibility with regards 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 off acrimoniously. US officials have accused Huawei of being a threat to national security, violating US sanctions, and being a vehicle for espionage.

But US technology companies, including Google, whose Android operating system is used by Huawei, quickly moved to demand some leeway in dealing with the ban, arguing that there would otherwise be disruptions to their business, customers and even US security. 

Extending the licence would be a middle road between fully implementing the ban, which China hawks in Washington are arguing for, and allowing it to lapse entirely. Mr Trump has suggested that finding a solution to Huawei might be part of any comprehensive deal with China on trade. 

“[An extension] kicks the can down the road; this is not a long-term solution,” said Samm Sacks, cyber security policy and China digital economy fellow at the New America Foundation. “Many in Washington want to kill the company. Others want to use it as leverage. You can’t have both,” she added. 

Senior US and Chinese negotiators are expected to hold face-to-face talks in Washington in early September in the hope that they yield a better result than the last session in Shanghai last month, which led Mr Trump to complain that Beijing was not abiding by its promises and move to impose the new round of tariffs. There is no firm schedule for next month’s negotiations, however. 

Get alerts on Huawei Technologies Co Ltd when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article