Trump hits partial pause on Huawei ban, but 5G concerns persist

As Trump and Xi Jinping resume trade talks, what do the announcements from the latest G20 summit mean for the future of the US-China trade war?

The news coming out of the latest G20 summit in Japan has been largely focused, just as Donald Trump likes it, on his trade war with China. But has the self-styled Dealmaker-in-Chief made a tactical error by appearing to relax punitive rules imposed on one of the Middle Kingdom's leading tech firms, Huawei?

While the details are still to be hammered out, the announcement would appear to be good news for US tech firms, in the short term at least. But it will only serve to buy Chinese firms more time as the country accelerates towards tech self-sufficiency, while failing to resolve the question of who builds America's 5G networks.

 

A good day for Huawei

Trump's announcement over the weekend came after he and Chinese President Xi Jinping met at the meeting of world leaders in Osaka. The two agreed to resume trade talks, halting the imminent imposition of tariffs on a further $300bn of Chinese imports to America as well as relaxing rules preventing US firms from selling components to Huawei. The latter agreement effectively reverses a decision made last month to stick Huawei and 70 subsidiaries on an "entity list", although even this had been subject to a subsequent 90-day delay. That decision was touted as one made on national security concerns about the Shenzhen-based network equipment and smartphone manufacturer, although Beijing officials have claimed it was more aimed at constraining the global rise of China's tech giants.

National Economic Council chairman Larry Kudlow subsequently clarified that these US national security concerns "are still paramount", and that the new agreement did not amount to a "general amnesty". Instead, it will only "grant some additional licenses where there is a general availability" of the parts needed by Huawei. These include key processors and software produced by US firms. Huawei was hit for six by the US Commerce Department order in May, which imperilled the supply of key smartphone kit from Qualcomm as well as Intel server and laptop chips, Xilinx and Broadcom networking kit and even Google Android support.

 

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