US Treasury Secretary Steven Mnuchin said on Sunday that the Trump administration might ease restrictions on Huawei if trade talks with China progress.
“I think what the president is saying is if we move forward on trade, that perhaps he’ll be willing to do certain things on Huawei if he gets comfort from China on that and certain guarantees,” Mnuchin said, “But these are national security issues.”
The US has been highly critical of the Chinese telecommunications company over concerns of national security. In 2018, the US federal government was banned from purchasing Huawei equipment because it was feared the equipment could be used for Chinese surveillance and espionage.
Last month, the US added Huawei to a trade blacklist that prevents any US business trading with the company, including Google who provides the Android software for their phones. The reason cited at the time was Huawei’s breaking of US sanctions by trading with Iran.
The Guardian reports that Huawei denied being controlled by the Chinese government, military or intelligence services. The US has pressured its allies to reject Huawei’s bid to provide the new 5G network infrastructure.
These restrictions must be seen in the wider context of the US-China trade war. President Trump has consistently increased tariffs on Chinese goods to reduce the US trade deficit and to respond to what the administration has called unfair trading practices.
And since taking office, Mr Trump has criticised the theft of US intellectual property and Chinese subsidies that drive US firms out of the Chinese market. China has responded by placing tariffs on US aluminium, cars, and soybeans, amongst other goods.
At the same time, Huawei was put on the trading blacklist, Mr Trump signed an executive order declaring that the US telecoms sector faced a “national emergency” – giving the commerce department the power to “prohibit transactions posing an unacceptable risk” to national security, the Financial Times has reported.
Speaking at a G20 meeting of finance ministers in Japan, Mr Mnuchin added: “If China doesn’t want to move forward, then President Trump is perfectly happy to move forward with tariffs to rebalance the relationship.”