(Bloomberg) -- President Donald Trump said Thursday that China’s Huawei Technologies Co., which was put on a U.S. blacklist earlier this month, could be part of a trade pact with the country.
“It’s possible that Huawei even would be included in some kind of a trade deal,” Trump told reporters at the White House, without providing details. “Huawei is something that’s very dangerous. You look at what they’ve done from a security standpoint, from a military standpoint, it’s very dangerous.”
The Trump administration is seeking to choke off Beijing’s access to key technologies by limiting the sale of vital U.S. components to the Chinese telecommunications equipment maker over security concerns.
The U.S. had held off on blacklisting Huawei out of concern the move could disrupt trade negotiations with China and only took action after the last round of trade talks hit an impasse, according to people familiar with the matter. The decision to curtail the Shenzhen-based company’s access to American suppliers unfolded quickly once trade talks broke down, the people said.
The Commerce Department action last week requires American suppliers of Huawei, a crown jewel of Chinese manufacturing, to seek U.S. government permission to do business with the company.
The decision touched off a massive disruption in technology supply chains, hitting some of the biggest component-makers. Intel Corp., Qualcomm Inc. and Broadcom Inc. told their employees they won’t provide products to Huawei until further notice.
Trade talks between Beijing and Washington deadlocked this month as Trump accused China of backing out of a deal that was taking shape with U.S. officials, saying China reneged on an agreement to enshrine a wide range of reforms in law.
Trump increased levies on $200 billion in Chinese imports to 25% from 10%, prompting retaliation from Beijing. The U.S. has said it’s prepared to hit China with new tariffs even as Trump said he’ll meet his Chinese counterpart, Xi Jinping, at next month’s G-20 summit in Japan, an encounter that could prove pivotal.
The Trump administration has offered a reprieve before to a Chinese telecommunications company, ZTE Corp., in a similar situation as Huawei.
The Trump administration last year announced a seven-year ban on U.S. exports to ZTE after it said the company violated sanctions agreements by selling American technology to Iran and North Korea. The ban forced ZTE to announce it was shutting down.
Trump then reversed course, saying he was reconsidering penalties on ZTE as a personal favor to Xi. Shortly after, his administration announced it would allow the company to stay in business after paying a fine, changing its management and providing security guarantees.
(Updates with background on ZTE from 9th paragraph.)
--With assistance from Josh Wingrove.
To contact the reporter on this story: Alyza Sebenius in Washington at email@example.com
To contact the editors responsible for this story: Alex Wayne at firstname.lastname@example.org, Sarah McGregor, John Harney
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.