Trump Escalates His Trade War

Written by SK Ashby

Even before Trump met with Chinese President Xi Jinping on the sidelines of the G-20 summit in June, the Trump regime said they would exempt some American companies from a blacklist that prohibits them from selling goods to Chinese-owned telecommunications giant Huawei, but it looks like that's not going to happen.

The Commerce Department was suppose to publish a list of exemptions this week, but it's now Friday and a list hasn't been published yet. Bloomberg reports that the decision has been delayed because of China's decision to stop buying American agriculture.

The White House is holding off on a decision about licenses for U.S. companies to restart business with Huawei Technologies Co. after Beijing said it was halting purchases of U.S. farming goods, according to people familiar with the matter.

Commerce Secretary Wilbur Ross, whose department has vetted the applications to resume sales, said last week he’s received 50 requests and that a decision on them was pending. American businesses require a special license to supply goods to Huawei after the U.S. added the Chinese telecommunications giant to a trade blacklist in May over national-security concerns.

The U.S. decision rattled stocks, bonds, currencies and even soybean prices around the world. Huawei suppliers Micron Technology Inc. and Western Digital Corp. declined as much as 2.2% after news of the delay in license approvals, while Qualcomm Inc., Xilinx Inc. and NeoPhotonics Corp. all fell more than 1% in after-hours trading.

I'm not qualified to say if Huawei is as much of a threat to national security as the White House claims it is, but it seems clear that these decisions are not being made in the interest of national security.

Government agencies have now been banned from buying equipment from Huawei and that makes sense for obvious reasons, but the Commerce Department's blacklist prohibits American companies from selling their goods to Huawei.

It feels like a stretch to say that sales of American goods to China is a threat to national security in the first place (I thought we liked exports), but Trump is making these decisions based on emotional whims and gut reactions, not based on an empirical threat or any known assessment of his advisers. The ban on government purchases of equipment from Huawei was mandated by Congress, but the blacklist is a creation of the White House.

The fact that this blacklist hurts American companies as much if not more than Huawei is clearly not being weighed as heavily as Trump's desire to wage a trade war in any way that he can.

This escalation will place Chinese and American officials even further apart from each other when they meet face-to-face for talks next month.

I'm not even sure what the point of holding more talks is.