Huawei could be part of US-China trade deal

Ann Santiago
May 25, 2019

South Korea says it's discussing security issues regarding its 5G, or fifth generation, cellphone networks with the United States following a report the Trump administration is demanding that Seoul join a "war" against Huawei. In another move that could target China, the Commerce Department said Thursday that it was considering a rule to put anti-subsidy tariffs on products from countries that undervalue their currencies.

Washington this month hiked existing tariffs on US$200 billion in Chinese goods to 25 per cent from 10 per cent, prompting Beijing to retaliate with its own levies on United States imports, as talks to end a 10-month trade war between the world's two largest economies stalled.

The US argues Huawei poses a national security risk, while Beijing accuses the US of "bullying" the company.

US President Donald Trump has raised the possibility of easing restrictions on Huawei as part of a broader trade deal with Beijing, despite labelling the Chinese telecommunications giant "very dangerous".

There were high hopes early this month that a resolution with China was within striking distance but that optimism largely evaporated when Trump said Beijing had backed away from commitments considered already settled.

At the heart of Trump's crackdown is the suspicion that Chinese firms help Beijing spy on foreign governments. Additionally, American goods shipped to China have been slowed from reaching market by unusually strict or cumbersome entry procedures, which affect the quality and marketability of perishable crops. In addition, he said China's gross domestic product (GDP) growth rate has remained 6.4 percent to 6.8 percent in recent 14 consecutive quarters, achieving a medium-to-high-speed growth as a large economy.

USA crude plunged 6% on fears that the trade standoff could knock the global economy out of kilter and kill demand for energy.

The president is talking about the US government buying unpurchased farm products and distributing the goods to underdeveloped countries.

"It's quite clear it is the US side that a few times changed its mind overnight and broke the tentative deal already reached".

Dan Henebry, a corn and soybean farmer in Buffalo, Illinois, said the payments are directed at rural areas that helped propel Trump into office.

"I don't know how China can do this because I'll be honest, we are getting hundreds of millions of dollars brought into our country".

As it stands, the USA has imposed 25 percent tariffs on $250 billion on imports from China, up from the 10 percent tariffs imposed a year ago.

Chinese President Xi Jinping has in recent days indicated he is readying his country for a prolonged trade war, calling for his people to prepare for a "new Long March" - a reference to a hard period in China's history.

Formal talks between US and China have stalled. Huawei "is deeply tied not only to China but to the Chinese communist party". In many instances, importers seeking to avoid the tariffs are doing what the Trump administration has suggested and switching to suppliers in other countries other than China.

The Chinese government's top diplomat, Wang Yi, said on Wednesday that China's door would always be open to further trade talks with the US.

The U.S. charges that China is stealing technology, unfairly subsidizing its own companies and forcing U.S. companies to hand over trade secrets if they want access to the Chinese market.

With control over the direction of its currency, China could easily use the currency as a tool to fight off any tariffs the US imposes, allowing it to devalue versus the dollar. However the Chinese firm's reliance on technologies controlled by U.S. organizations like the WiFi Alliance, Bluetooth SIG, SD Association, and others underscores quite how much global content goes into even heavily localized devices.

Whether or not Huawei poses a security threat to the United States, the U.S. hasnt brought forth any single case or concrete proof of its claims.

"Everybody knows Huawei is a privately owned company".

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