Donald Trump opens door to including Huawei in China trade deal

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Donald Trump said that Huawei, the Chinese telecommunications network company, was “very dangerous” but could still be “included” in a trade deal with Beijing, as the US president announced a $16bn bailout package for farmers hit by escalating tariffs.

Speaking at the White House on Thursday as financial markets suffered a new day of losses stemming from trade tensions with China, Mr Trump said there remained a “good possibility” that the negotiations with Beijing could get back on track. 

After talks with China broke down earlier this month, Mr Trump moved quickly to slap new tariffs on Chinese imports, but also opened another front in the economic conflict by placing Huawei — one of China’s leading global technology companies — on an export blacklist run by the US commerce department. 

Although US officials have frequently insisted that the crackdown on Huawei is a national security issue, rather than a trade issue, Mr Trump has in the past suggested the dispute over the company could be resolved in a trade agreement with Xi Jinping, the Chinese president. 

Mr Trump said Huawei was “very dangerous, from a security standpoint”, but insisted that it was “possible that Huawei could be included as part of a trade deal”. His comments at this stage in the dispute could raise hopes that the US was prepared to reverse its hardline stance against the company, at least in part, or may simply be interpreted as an attempt to reassure jittery investors. 

Earlier in the day Sonny Perdue, the US agriculture secretary, suggested that the trade war with China was likely to last through the summer, as the administration unveiled details of the rescue package for farmers.

The bailout marked the second multibillion-dollar move by the US president to help farmers in as many years, as he tries to contain the damage from retaliatory tariffs imposed by China, which have sharply reduced American exports to the Asian nation.

“We will ensure that our farmers get the relief they need, and very, very quickly,” Mr Trump said, adding that agricultural producers had been “attacked by China” and he was just helping them get a “beautiful, flat, level playing field”. 

US officials said the payments would be made in three tranches — with the first coming in July or August. But Mr Perdue played down the chances of a deal to end the trade war before then, even with a meeting expected between Mr Trump and Xi Jinping, the Chinese president, at the G20 leaders’ summit next month in Japan. 

“While we would love a trade deal in that period of time . . . it’ll be very difficult to understand how a trade deal could be consummated prior to that first payment, or first tranche,” Mr Perdue said. He added that the second disbursement, expected in November, and the third payment, expected in January 2020, would depend on the fate of the trade talks with Beijing.

The US and China were close to a deal earlier this month but negotiations broke down at the eleventh hour, leading Mr Trump to impose higher tariffs on $200bn of Chinese imports and threaten more as early as late June, triggering retaliation plans from Beijing. The addition of Huawei to the US export blacklist, preventing US companies from selling products to it without a licence, last week further damaged the prospects of a patch-up in trade relations. 

“The US . . . crackdown on Chinese companies not only seriously damages the normal commercial co-operation between both countries, but it also forms a great threat to the security of the global industrial and supply chain,” Gao Feng, a Chinese commerce ministry spokesman, said on Thursday. “China is firmly opposed to this. We will closely monitor developments and make adequate preparations.”

US officials said the agriculture package was composed of direct payments to farmers worth $14.5bn, as well as $1.4bn in government purchases of agricultural goods to be distributed to food banks and impoverished Americans, a larger bailout than the $12bn offered in 2018.

Mr Trump said earlier this month that he wanted to direct farm purchases to poor countries as food aid in the package, but that option was discarded. “Certainly that was contemplated initially. When President Trump learned of the inefficiency and the logistics challenges of distribution worldwide, as well as the potential for market disruption in many of these countries, he . . . wanted the revenue to go into American producers’ pockets, where the challenge is, rather than any other avenue,” Mr Perdue said. 

The US agriculture department did not disclose details on eligibility and rates of payment for different products, saying they would be “released at a later date”, triggering criticism. “As best I can tell Trump admin has added considerably to the uncertainty regarding remaining acreage decisions for 2019, not lessened it. Let’s see . . . gonna have a big assistance programme but not gonna tell you the rate until after you plant,” tweeted Scott Irwin, agricultural economist at the University of Illinois. 

However, the department did say that producers of everything from barley and canola to corn and soyabeans would benefit. 

“We thank President Trump for recognising that our patriot farmers have borne the brunt of China’s trade retaliation,” said David Herring, a pork producer from North Carolina and president of the National Pork Producers Council.



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