Around 24 hours after the US published an interim rule banning federal agencies from purchasing telecom equipment from Huawei and four other Chinese firms, the White House is said to be delaying a decision on licenses to allow US firms to sell to Beijing’s corporate crown jewel.
The publication of the interim rule on Wednesday was expected, and we only mention it here to ensure nobody gets confused. This fresh bit of news suggests Trump is set to effectively go back on his promise to take it easy on Huawei, as communicated in the wake of the Osaka truce on June 29.
The leniency the president telegraphed in Japan was roundly criticized by everyone from Chuck Schumer to Marco Rubio to Kyle Bass, all of whom lamented Trump’s apparent retreat.
Over the past several weeks, US tech firms have been angling to get licenses expedited. That was the subject of a high profile meeting between the president, Larry Kudlow and the likes of Alphabet, Broadcom, Cisco, Intel and Micron on July 22.
The companies asked Trump to make “timely” decisions when it comes to license applications for sales to Huawei. Trump agreed.
Now, it looks like that’s in jeopardy.
“The White House is holding off on a decision about licenses for US companies to restart business with Huawei after Beijing said it was halting purchases of US farming goods”, Bloomberg said Thursday evening, citing the ubiquitous people familiar with the matter.
Trump cited China’s failure to make good on promises to buy large quantities of US farm goods in his decision to threaten more tariffs last week.
On Monday, just an hour or so after the PBoC set the fix weaker than expected prompting the offshore yuan to slide through 7, multiple reports indicated that Beijing had instructed buyers to halt purchases of US agricultural products.
This is a sore spot for the administration, as Trump continues to insist that America’s farmers will not go bankrupt in vain.
If Trump does turn the screws on Huawei anew, he’ll have plenty of support on Capitol Hill. In fact, lawmakers have recently attempted to enshrine the blacklisting of the company into law in order to make it impossible for Trump to back track.
While US companies have found ways around Commerce’s ban on selling to Huawei, any renewed push to ostracize the company will most assuredly be seen as yet another escalation by Beijing.