White House Planned To Use Huawei As Trade ‘Bargaining Chip’

Once trade talks had broken down, there was a 'scramble' to implement the measures against Huawei.

Courtesy of ZeroHedge

If there was any lingering doubt that President Trump has treated Huawei like a 'bargaining chip' during trade talks with the Chinese, Bloomberg just put the issue to rest.

In a report sourced to administration insiders, BBG reported that the Trump administration waited to blacklist Huawei until talks with the Chinese had hit an impasse, because they were concerned that targeting Huawei would disrupt the talks.

Plans to punish Huawei – including possible economic sanctions – had been kicking around for months. And prosecutors took their first tentative steps toward holding Huawei 'accountable' by convincing Canada to arrest Huawei CFO Meng Wanzhou.

And once trade talks had broken down, there was a 'scramble' to implement the measures against Huawei.

Though BBG doesn't offer a definitive answer on this, it reports that some are suspicious that Trump is pressuring Huawei to 'gain a negotiating edge' with Beijing (meanwhile, the Chinese leadership are furious about the decision).

Timing of the U.S. action raised questions about whether President Donald Trump is punishing the company in part to gain a negotiating edge with Beijing in a deepening clash over trade. Talks between Beijing and Washington deadlocked this month as Trump accused China of backing out of a deal that was taking shape with U.S. officials, saying China reneged on an agreement to enshrine a wide range of reforms in law.

Another take on what happened suggested that the decision to hold back on Huawei actually came from the bureaucracy, as administration officials were worried President Trump would just scrap the measures as a favor to Xi, like he did last year with ZTE Corp. Those concerns haven't entirely abated.

Washington has offered Huawei some wiggle room by suspending the new restrictions for 90 days. The company has been stockpiling chips, and reportedly already has enough to keep its business running for three months. 

But this report effectively confirms that the administration wasn't being entirely truthful when it said there was 'no link' between Huawei and the trade talks. Trump said back in December that he would go so far as to intervene in efforts to extradite Meng Wanzhou if it would help with the trade talks. And although that would be extreme, we should rule it out just yet.

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