Adding to the attempts to by some of his top trade advisers to downplay the uncertainty created by the arrest of the CFO of Chinese tech giant Huawei Technologies, United States. President Donald Trump tried to sound optimistic about the soon to be held trade negotiations with China.
“China talks are going very well,” Trump said on Twitter, but did not offer any more details.
Concerns about the arrest of Huawei Chief Financial Officer Meng Wanzhou in Canada at the request of U.S. authorities potentially impacting the U.S.-China relations or any future retaliatory action against executives of American companies with business interest in China were expressed by a number of major companies.
China has demanded the immediate release of Meng, 46, who is also the daughter of the founder of Huawei. It is alleged by the US that she had tried to cover up the company’s relationship with a Hong Kong based company attempting to sell tech equipment of Huawei to Iran violating the US sanctions on Tehran.
There is little chance that the arrest of the Huawei executive would have any spill over effect in the soon to be held negotiations between the US and China on trade which are aimed to enhance the purchase of China of U.S. farm and energy commodities, bringing down of Chinese tariffs and bringing in significant alterations to Chinese policies and strategies to secure intellectual property rights and technology transfers of American companies, said Larry Kudlow, director of the White House’s National Economic Council, in a television interview.
There was a significant difference between the trade talks and the investigations that the US is carrying out on the alleged violation of U.S. sanctions against Iran by Huawei because the later was a case of national security, Kudlow said.
“You can’t break the law. You break the American law, you break the Canadian law, you’ve got to pay the consequences of that,” Kudlow said of the Huawei case. “That was the case with other companies, and will continue to be the case. These are issues of national security.”
There was a sprint for selloffs in the market following the arrest and the biggest losers were tech companies.
While terming the arrest of Meng to be a mere coincidence, the U.S.-China trade talks and the Huawei arrest were identified as “two separate events” by White House trade adviser Peter Navarro in a television interview.
The arrest was an outcome of “the bad actions of Huawei,” Navarro said and added that there was a “frightening” risk of the Chinese government using the company’s tech equipment to spy on western countries.
“The timing was unusual, but the actions were legitimate.”
“It’s not a question of walking away. It’s a question of moving forward on the strategy, which is to simply raise the tariffs” on Chinese goods, said Navaro when asked if the United States would withdraw from the trade with China is the differences between the two largest economies of the world were not resolved within the 90 day period.
(Adapted from Reuters.com)