Treasury Secretary says US may ease restrictions on Huawei with progress on commerce deal

The United States could ease off its restrictions on embattled Chinese telecom Huawei, says US Treasury secretary Steven Mnuchin, if the US and China make progress in coming up with a trade deal, according to Reuters.

Mnuchin made the comments on Sunday, saying that “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. But these are national security issues.”

Those comments come after President Donald Trump issued an executive order in May that allows the government to forbid US companies from selling technology to foreign firms deemed a risk to national security. That order has caused considerable headaches for Huawei, which has long been targeted by the US intelligence community as security threat, citing potential ties to the Chinese government. The result has led numerous US tech firms to stop selling components and software to Huawei, which in turn has led China to threaten to retaliate with a blacklist or other “permanent” consequences.

Alongside those comments, the White House’s acting budget chief, Russell T. Vought, wrote a letter to Vice President Mike Pence and Congressional officials, asking for a delay in the implementation of the National Defense Authorization Act, which Trump signed into law last fall, and which bans the government and contractors from using components from Huawei, ZTE, or a number of other Chinese communications companies.

The row comes amidst a larger trade war between the US and China, in which the two countries have leveled tariffs against one another as the Trump administration attempts to leverage a better trade deal from China and to reduce its trade deficit. Efforts at a new trade deal have stalled lately, and Mnuchin indicated that Huawei’s predicament could be a negotiating tactic to push China towards a more favorable deal with the US. “If China wants to move forward with the deal,” he said, “we’re prepared to move forward on the terms we’ve done. If China doesn’t want to move forward, then President Trump is perfectly happy to move forward with tariffs to rebalance the relationship.”

Updated June 9th 4:10PM ET: Updated to include word that the White House wants to delay implementing parts of the National Defense Authorization Act.

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