‘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.”

 

 

 


Virus fears push stocks to 2-week low

Updated 28 January 2020

Virus fears push stocks to 2-week low

  • China has confirmed more than 2,700 cases of the new virus, with 81 deaths. Most have been in the central city of Wuhan

LONDON: World shares slipped to their lowest in two weeks on Monday as worries grew about the economic impact of China’s spreading coronavirus, with demand spiking for safe haven assets such as Japanese yen and Treasury notes.

The death toll from the coronavirus outbreak in China rose to 106 and the virus spread to more than 10 countries, including France, Japan and the US. Some health experts questioned whether China can contain the epidemic.

By midday in London, MSCI’s All-Country World Index, which tracks shares across 47 countries, was down 0.6 percent to its lowest since Jan. 9.

In Europe, stock markets slumped at the start of trading, tracking their counterparts in Asia. The pan-European STOXX 600 index fell 2 percent to its lowest level since Jan. 6, and the Euro Stoxx 50 volatility index jumped to its highest level since December.

“The coronavirus is an economic and financial shock. The extent of that shock still needs to be assessed, but it could provide the spark for an arguably long-overdue adjustment in the capital markets,” Marc Chandler, chief market strategist at Bannockburn Securities, told clients.

In Asia, Japan’s Nikkei average slid 2 percent, the biggest one-day fall in five months. A Tokyo-listed China proxy, ChinaAMC CSI 300 index ETF, fell 2.2 percent. Many markets in Asia were closed for the Lunar New Year holiday.

US S&P 500 mini futures were last down 1.36 percent, suggesting an open in the red on Wall Street later. The VIX volatility index, also known as Wall Street’s “fear gauge,” hit its highest levels since October.

The ability of the coronavirus to spread is getting stronger and infections could continue to rise, China’s National Health Commission said on Sunday. More than 2,800 people globally have been infected.

China announced it will extend the week-long new year holiday by three days to Feb. 2 and schools will return from their break later than usual. Chinese-ruled Hong Kong said it would ban entry to people who have visited Hubei province in the past 14 days.

“While the continued spread of the virus is concerning, we were expecting that the outbreak could worsen before being brought under control,” UBS strategists wrote in a research note, adding that they expected impact on the region’s economy and risk assets to be short-lived.

“Sentiment may remain depressed in the near term, especially for those sectors most impacted, however we retain a positive outlook for emerging market stocks, including a preference for China equities within our Asia portfolios.”

MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.45 percent, although markets in China, Hong Kong, Taiwan, South Korea, Singapore and Australia were closed on Monday.

All three major Wall Street indexes closed sharply lower on Friday, with the S&P 500 seeing its biggest one-day percentage drop in over three months.

The S&P 500 lost 0.9 percent, the Dow Jones Industrial Average 0.6 percent and the Nasdaq Composite 0.9 percent. The US Centers for Disease Control and Prevention has confirmed five case of the virus on US soil.

US Treasury prices advanced, pushing down yields. The benchmark 10-year note’s yield fell to a three-and-half-month trough of 1.6030 percent. It last traded at 1.6321 percent.

Elsewhere in bonds, the Italian 10-year yield fell to a three-month low Monday after right-wing leader Matteo Salvini failed in his bid to overturn decades of leftist rule in the northern region of Emilia-Romagna on Sunday, bringing some relief to the government.

In the currency market, the Japanese yen strengthened as much as 0.5 percent to 108.73 yen per dollar, a two-and-a-half-week high.

The euro last traded unchanged to the dollar.

China’s yuan tumbled to a 2020 low, and commodity-linked currencies such as the Australian dollar fell, as growing fears about the spread of a coronavirus from China pushed investors into safe assets.

The coronavirus outbreak also pressured oil and other commodity prices.

US West Texas Intermediate crude futures plummeted 2.69 percent to a three-and-a-half-month low of $52.13. Brent shed more than 3 percent to a three-month low of $58.50 per barrel.

Spot gold rose as much as 1.0% to $1,585.80 per ounce, the highest level since Jan. 8, as the coronavirus outbreak pushed up demand for the safe-haven metal.