‘Good chance’ for more US exports to Huawei: Trump aide

Many US lawmakers are concerned about any lifting of the ban against Huawei. (AP)
Updated 01 July 2019

‘Good chance’ for more US exports to Huawei: Trump aide

  • US officials fear the systems built by Huawei could be used by China’s government for espionage via built-in secret security “backdoors”
  • Huawei has vigorously denied that, saying the US has never provided proof to substantiate it

WASHINGTON: As the US and China pursue trade talks, there is a “good chance” that more US firms will be granted licenses to sell products to controversial Chinese telecoms giant Huawei, White House economic adviser Larry Kudlow said Sunday.

Kudlow’s comments came after President Donald Trump and China's Xi Jinping agreed on Saturday to a truce in their trade war, and Washington pledged to hold off on new tariffs while they negotiate.

While Trump had signaled the softer position on Huawei, a sticking point in trade talks, by saying US companies could sell equipment “where there’s no great national security problem,” Kudlow added a bit of detail.

The senior Trump aide told “Fox News Sunday” that “there’s a good chance the Commerce Department, Secretary (Wilbur) Ross, will open the door on that and grant new licenses.”

The US has said it fears that systems built by Huawei — the world leader in telecom network equipment and No. 2 two smartphone supplier — could be used by China’s government for espionage via built-in secret security “backdoors.”

Huawei has vigorously denied that, saying the US has never provided proof to substantiate it.

Many US lawmakers, including Senate Republicans like Ted Cruz and Marco Rubio, are concerned about any lifting of the effective ban against Huawei accessing crucial American technology or operating in the US market.

“If President Trump has agreed to reverse recent sanctions against Huawei, he has made a catastrophic mistake,” Rubio tweeted on Saturday.

Kudlow emphasized that Huawei will remain on the so-called US Entity List — foreign companies and individuals that are subject to specific export and technology transfer licensing requirements.

“This is not a general amnesty,” Kudlow said.

“The Commerce Department will grant some temporary additional licenses where there is a general availability” of the products to be sold, he added.

In a later interview on CBS talk show “Face the Nation,” Kudlow said: “We understand the huge risks regarding Huawei.”

On the general issue of US-China trade talks, Kudlow declined to offer any deadline for the resolution of the dispute between the world’s top two economies, though he admitted the talks could “go on for quite some time.”

“There are no promises, there’s no deal made, no timetable,” he said. “Just resuming the talks... is a very big deal.”

 

 

 


WEEKLY ENERGY RECAP: Keeping things in balance

Updated 08 December 2019

WEEKLY ENERGY RECAP: Keeping things in balance

  • The over-compliance will result in cuts of 1.7 million bpd

Brent crude rose above $64 per barrel after OPEC+ producers unanimously agreed to deepen output cuts by 503,000 barrels per day (bpd) to a total 1.7 million bpd till the end of the first quarter of 2020.

The breakdown is that OPEC producers are due to cut 372,000 bpd and non-OPEC producers to cut 131,000 bpd.

Current market dynamics led to this decision as oil price-positive news outweighed more bearish developments in the US-China trade narrative that has weighed on oil prices throughout the year, with US crude exports rising to a record 3.4 million bpd in October versus 3.1 million bpd in September.

OPEC November crude oil output levels at 29.8 million bpd show that producers were already overcomplying with its current 1.2 million bpd output cuts deal by around 400,000 bpd. 

The over-compliance will result in cuts of 1.7 million bpd, especially when Saudi Arabia continues to voluntarily cut more than its share.

This makes the agreed 1.7 million bpd output cuts pragmatic since it won’t taken any barrels out of the market.

It isn’t a matter of OPEC making room in the market for other additional supplies from non-OPEC sources, as OPEC barrels can’t be easily replaced.

Instead, this is about avoiding any oversupply that might damage the global supply-demand balance.

Saudi energy minister Prince Abdulaziz bin Salman has effectively kept his promise and managed to smoothly forge a consensus among OPEC and non-OPEC producers.

He has also successfully managed the 24-country coalition of OPEC+ including Russia in reaching an agreement.

Despite suggestions otherwise in recent coverage of the Vienna meeting, the deeper cuts announced on Friday have nothing to do with the Aramco IPO. Let’s remember this meeting was scheduled six months ago and the IPO has been in the works for much longer.

The Aramco share sale did not target a specific oil price. If that was a motivating factor it could easily have chosen another time.