In May, Trump's Commerce Department added Huawei, the world’s largest telecom-equipment manufacturer, to its Entity List, which meant that no American company could sell products or technology to Huawei.
China has been demanding three things as part of a new trade deal: 1) that Huawei be removed from the Entity List; 2) that Trump lift the recently-imposed tariffs; and 3) and end to Washington’s efforts to get China to buy U.S. goods in excess of what was agreed in December 2018.
Even though American companies have been complying with the Entity List prohibition, Intel, Qualcomm, and other chip suppliers have also been lobbying the Trump administration to ease the ban on Huawei. Trump has claimed that Huawei poses a threat to American national security and has been trying to persuade American allies to not install Huawei equipment on 5G networks.
In response to a reporter's question at the G-20 conference, Trump's words made it clear that his administration would resume the flow of high-tech American products to the embattled Chinese company.
Trump’s just-announced concession on Huawei mirrors his reprieve of ZTE, another large Chinese telecom-equipment maker. Trump, in what he described as a “personal favor” to Chinese ruler Xi Jinping, removed ZTE from the Entity List back in May.
Trump also admitted at the press conference that he would not be imposing any additional tariffs on Chinese goods. Previously, he had threatened to tariff an additional $325 billion of such products.
These two major concessions represent a major walk-back of threats Trump has been making of late-- and shows the world that China truly has the upper hand in Trump's trade war.
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