White House economic adviser Larry Kudlow confirmed Friday that the U.S. policy towards Chinese telecom giant Huawei would be a factor in the upcoming trade talks with Beijing.
The White House had previously sought to keep Huawei, which it has declared a national security threat, separate from the ongoing talks with Beijing. However, the Trump administration agreed late last month to roll back restrictions on doing business with Huawei as part of the agreement to restart trade talks.
Kudlow indicated that further changes could be on the table too.
“The president’s view, which is what matters, is that they will be part of the general talks regarding trade. I think that is quite evident from what happened in Osaka,” Kudlow told Bloomberg. He said the administration remained wary about the company and its links to Beijing, calling it a “difficult” issue.
“We will not open licenses for any national security areas, be they chips or whatever,” he said.
This was a change in tone from the administration, which had previously limited Huawei’s ability to do business in the U.S. and pressured other countries to freeze it out as well. The administration argued this was purely a national security issue, not a trade one.
“We’ve been very clear and China understands that these are separate tracks,” Treasury Secretary Steven Mnuchin said in December.
Trade talks between the U.S. and Beijing stalled in May following accusations from the U.S. that Beijing had tried to walk back concessions it had made earlier in the talks, a charge Beijing has denied. Late last month following a meeting with Chinese President Xi Jinping at the G-20 summit in Osaka, Japan, President Trump announced that talks were back on.
As part of the agreement to get the talks back on track, Trump said, “U.S. companies can sell their equipment to Huawei. I’m talking about equipment where there is no great national emergency problem with it. But the U.S. companies can sell their equipment.”
Kudlow said further relaxation of limits was possible, but argued the administration would draw the line at sensitive technologies.
“We are not talking about core issues with respect to telecom and so forth. We are talking about what I call general merchandise. The Commerce Department may decide to grant some additional licensing for telecom products that are low-tech and are readily available around the world … stuff that could be bought in Asia, for example. That will probably be relaxed,” he said.
The White House adviser said the talks with Beijing had no timeline and could extend into the 2020 election.
