Tariff wars: U.S. blacklists China’s Huawei

The Trump administration clamps down on Chinese telecoms giant Huawei by adding it to a list of companies banned from buying components and technology from U.S. firms without government approval.

A one-two punch aimed at the world’s largest telecom equipment maker.

U.S. President Donald Trump on Wednesday (May 15) banned China’s Huawei and 70 of its affiliates from buying vital U.S. technology without special approval.

In a statement, Commerce Secretary Wilbur Ross said the ban was meant to “prevent American technology from being used in ways that potentially undermine U.S. national security.”

Huawei is seen as a national champion in China, generating $93 billion in revenue last year.

But the ban is bad news for the company’s outlook.

U.S. officials say it may squeeze sales of some products that rely on American suppliers.

The ban was announced shortly after Trump signed an executive order barring U.S. firms from using telecoms gear made by companies that pose a national security risk.

And while the order didn’t name any specific companies, U.S. officials have previously labelled Huawei a “threat”.

Together, the two moves mark a major escalation in Washington’s worldwide campaign against Huawei, sparked by fears that its phones and network equipment could be used by Beijing to spy on Americans.

Washington has also leaned heavily on its allies to ditch Huawei equipment in next-generation 5G networks.

For its part, Huawei denies its products pose a security threat.

The Chinese telecom giant responded to Washington’s latest moves saying it was “ready and willing to engage with the U.S. government…to ensure product security.”

But also sounded a warning that “restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger; instead….leave the U.S. lagging behind in 5G deployment.”

The Trump administration’s Huawei crackdown follows another round of tit-for-tat tariffs between the world’s two largest economies.

Trade negotiations seem to have stalled for the time being although there are signs that the U.S., at least, still wants to talk.

Treasury Secretary Steven Mnuchin on Wednesday (May 15) said he planned to visit China soon, saying “there’s still a lot of work to do.”

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