The Trump administration has launched a dramatic attack on Huawei by requiring US companies to obtain licences to sell critical technology to the Chinese telecoms company.
The White House and US Department of Commerce took dual actions on Wednesday that would effectively ban Huawei from selling technology into the American market, and could also prevent it from buying semiconductors from Qualcomm in the US that are crucial for its production.
Donald Trump issued an executive order declaring a “national emergency” in relation to threats against US telecoms, in a move that authorised the commerce department to “prohibit transactions posing an unacceptable risk” to national security. In a potentially much more significant development, the department put Huawei on the so-called Entity List — a move that means US companies will now have to apply for a licence to sell technology to the Shenzhen-based company.
“The US has basically openly declared it is willing to engage in a full-fledged technology war with China,” one analyst said.
The US has raised fears about Huawei contributing to the development of next-generation 5G networks. Here are some of the potential security risks the Chinese company poses. (FT, Reuters)
In the news
China dumps Treasuries
China escalated sales of US Treasuries, increasing concerns that it might weaponise its position as the US government’s largest foreign creditor. The trade war is just the opening stage of US-China geopolitical competition, Philip Stephens writes, while the Nikkei Asian Review has this piece on how Xi Jinping's colleagues rejected an ‘unequal’ trade deal. (FT, NAR)
. . . and on another trade front
Donald Trump has handed the EU a reprieve by delaying an impending decision over whether to slap car tariffs on Europe and Japan for as long as six months. (FT)
FAA chief criticises Boeing
Boeing should have informed pilots about the anti-stall system on the 737 Max jet before two fatal crashes, the US aviation regulator’s acting chief told Congress. The rare critique came hours after a recording emerged from a contentious meeting last year between US pilots and Boeing. (FT, CBS)
Trump pardons media mogul
Donald Trump has issued a full pardon to Conrad Black, the former media magnate who served more than three years in prison over his role in a multimillion-dollar fraud at Hollinger International, the newspaper group he created and controlled. (FT)
A German start-up will reveal on Thursday what it claims is the world’s first all-electric, five-seater jet, which it hopes will revolutionise congested urban transport with public air taxi services as early as 2025. (FT)
German authorities raid banks
German criminal prosecutors, police and tax investigators raided 14 German banks on Wednesday seeking evidence of suspected tax fraud by wealthy clients of a British Virgin Islands-based former Deutsche Bank unit. (FT)
WeWork staunches losses
WeWork reversed underlying losses in the first quarter as executives pitched strong growth prospects ahead of a possible public listing. WeWork’s parent company will also buy out its co-founder’s stakes in buildings where the lossmaking office space provider is a tenant — becoming its own landlord. (FT, Bloomberg)
Tories demand May’s exit date
Theresa May will face renewed calls by Conservative party grandees on Thursday to set a deadline on her premiership amid signs that her Brexit deal is headed for another parliamentary defeat in early June, with Labour withdrawing support. (FT)
China’s slowing pains
FT readers respond
As China faces slowing growth, we asked our readers what they felt were the country’s biggest challenges. People shared personal accounts of doing business and expressed anxieties about inequality, corruption and “increasing isolationism”. Here’s what some of you had to say.
Read more in the FT’s China’s Slowing Pains series, which explores how China’s shifting business environment is affecting foreign businesses as well as local entrepreneurs and worrying the middle class. (FT)
The day ahead
Profit margins are the focus as the world’s biggest retailer prepares to report quarterly earnings on Thursday. The group is investing heavily under chief executive Doug McMillon to “reimagine retail” as it tries to compete with Amazon. (FT)
The European Commission and European Central Bank meet in Brussels on Thursday to discuss the euro and fiscal growth. The annual conference comes in the shadow of gloomy prospects for Germany’s benchmark bond yield, which sank to its lowest level in three years. (FT)
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What else we’re reading
Women take on hedge funds
The gender ratio in hedge funds is among the most lopsided in finance: last year, just 19.3 per cent of hedge fund employees were women. Yet finally there are signs of change, with a clutch of high-profile hedge funds run by women. (FT)
Occidental’s $56bn gamble to find value in shale
When Vicki Hollub stood up to speak at Occidental Petroleum’s annual meeting last Friday, she knew she was facing a sceptical audience. After three years as chief executive, she had just agreed the most ambitious move of her career, the $56bn acquisition of rival Anadarko Petroleum, and many investors feared she was overreaching. (FT)
The potential of CBD
Cannabidiol has been touted as a treatment for everything from epilepsy to anxiety, pain, sleeplessness, Crohn’s disease, arthritis and even anger. While plenty of legitimate and exciting research is being done, is CBD oil really a therapeutic cure-all? (NYT)
Versailles party exposes Ghosn’s misjudgment
For the past couple of weeks, since the subject first emerged in a leak, one question has nagged louder than the many others in the Carlos Ghosn affair: exactly what kind of palace-based, Louis XIV-themed banquet does €635,000 buy you these days? (FT)
Naomi Osaka opens up
Of the tens of millions on the planet who play tennis, the Japanese athlete is the top-ranked female. That doesn’t make her one of the greats, she tells the FT’s Murad Ahmed — not yet. (FT)
Your employer may be reading this
Companies have long been able to monitor workplace emails and idle web browsing, but new tech start-ups now say they can crunch the data to reveal exactly how useful each employee really is. (FT)
The latest edition of our #techFT newsletter has details of the week ahead in technology. Click here to get #techFT in your inbox, Monday to Friday.
The country that banned McKinsey
The consulting company’s work on a dubious railway project prompted corruption investigations in Mongolia and the US. Then McKinsey’s fortunes changed again. (ProPublica)
Russia’s Crimea chokehold
Russia claimed a $3.7bn bridge spanning the Kerch Strait would help integrate Crimea’s economy. But Ukraine believes the bridge serves another strategic aim: imposing a stranglehold over commercial shipping in the Azov Sea. (FT)
Trumpians in the White House
Donald Trump needs more of them, instead of unreconstructed Republicans like his national security adviser John Bolton and chief of staff Mick Mulvaney, writes Janan Ganesh. (FT)
Danish MP Joachim Olsen has adopted an unconventional campaign strategy for re-election in a June 5 poll — advertising on a pornography site. “You need to be where the voters are.” (Politico)
Lost in the sand
While it is being poured into much-needed urban development, particularly in China and India, sand is not a limitless gift of nature — there are grave environmental consequences from the plundering of lakes, rivers and coastal areas, says Anjana Ahuja. (FT)
Video of the day
The race to replace rubber tyres
High-performance car tyres are still made predominantly from natural rubber, but some experts predict shortages as soon as the 2030s, sending companies scrambling for alternatives. (FT)
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