Trump administration to meet on Huawei export curbs after Pentagon pushback: Sources

Some in the Trump administration favour close trade ties with Beijing while others see China and Huawei as serious threats to national security.
Some in the Trump administration favour close trade ties with Beijing while others see China and Huawei as serious threats to national security.PHOTO: REUTERS

WASHINGTON (REUTERS) - The Trump administration is planning to meet later this month to discuss efforts to further limit exports to China and its flagship telecoms company Huawei, as it seeks to keep state-of-the-art US technology out of the hands of adversaries, two sources familiar with the matter said.

The gathering, currently scheduled for Feb 28, will bring together policymakers to hammer out differences after the US Commerce Department withdrew a rule aimed at further reducing foreign shipments to Huawei Technologies amid pushback from the Pentagon, one of the people said.

The meeting, which is expected to include high-level officials including Commerce Department Secretary Wilbur Ross, Defence Secretary Mark Esper and State Department Secretary Mike Pompeo, is aimed at resolving disagreements over how best to approach the blacklisted Chinese company and the broader war with China over technological dominance.

Some in the Trump administration favour close trade ties with Beijing while others see China and Huawei, the world's largest telecoms equipment maker, as serious threats to national security.

"The administration has to decide how to match its rhetoric on China with policies to deny China key technology and industry," said Mr Tim Morrison, a former senior director at the White House’s National Security Council under President Donald Trump, who favours tougher rules. 

"Too many tools have not been brought to the President because the entire administration isn’t yet in the fight. That must end," he added.

US companies have argued the measures that have been floated would harm US business by driving customers to foreign competitors, while doing little to thwart Huawei. 

The agencies did not immediately respond to a request for comment.

The Commerce Department in May placed Huawei on a trade blacklist, citing national security concerns. That allowed the US government to restrict sales of American-made goods to the company and a small number of items made abroad that contain US technology.

Under current regulations, key foreign supply chains remain beyond the reach of US authorities, which fuelled frustration among China hawks and prompted a push to expand US authority to block more shipments to Huawei.

But a draft rule by the Commerce Department to expand its authority to block more shipments to Huawei - first reported by Reuters in November - was stymied by opposition from the Pentagon last month over concerns about harm to US interests.

The Treasury Department also pushed back against the measure, sources said.

 
 
 
 

In an unusual move, Commerce withdrew the rule from the inter-agency review process, pending a meeting of principals to resolve differences.

The gathering comes amid a deepening tech war between the United States and China. The Trump administration is trying to keep sensitive technologies that could be used to thwart American interests beyond the reach of Beijing, by cracking down on exports and limiting Chinese investment in key US sectors.

Reuters reported in December that the Commerce Department was finalising rules to limit tech exports to adversaries while the Treasury Department has issued new rules to beef up scrutiny of foreign investment in the United States.