Bargaining chip? Trump says Huawei could be part of China trade deal

President Donald Trump delivers remarks in support of farmers and ranchers with Agriculture Secretary Sonny Perdue (3rd L) in the Roosevelt Room at the White House. Photo / Getty.

COMMENT:

US President Donald Trump today dropped another strong hint that his country's ban on Huawei could be a trade war bargaining chip.

At a press conference to announce US$16 billion in aid for US farmers hit by Chinese tariffs, Trump said Huawei was "very dangerous, from a security standpoint" but also insisted "It's possible that Huawei would be included in some kind of a trade deal."

The US has blocked its phone companies from using Huawei gear for network upgrades (as the GCSB did here), had a Huawei executive arrested in Canada for alleged sanctions-busting and, just earlier this week, barred US companies like Android software maker Google and chipmakers Intel, Broadcom and Qualcomm from supplying Huawei - a move that does not affect existing Huawei handsets but imperils future models.

There are two narratives around the US government's tough line on Huawei.

One is that it's based around legitimate concerns about the Chinese maker of phones and telco networking is colluding with its government over espionage. After all, US security agencies have long harboured suspicion about Huawei.

The other is that Huawei is, in its own words, a "political football." The Trump White House targeting it as China's most successful tech company in a bid to get trade-talk leverage. If Beijing gives ground on tariffs, then Huawei's problems could melt away as a quid pro quo.

Both could be true, but it's Trump who's at the driving wheel - and the Art of the Deal author is perhaps most interested in a successful trade negotiation than wading through the murky cyber-security controversy.

So while the US President is Huawei's worst enemy right now, threatening its entire business in the West, he could also be its best friend if he does indeed give it a pardon, so to speak, as part of a trade war truce.

That would be a quicker, cleaner outcome for the Chinese company than a decade or more of legal and political squabbling over espionage allegations.

Today, as markets continued to tank, Trump said a trade deal with China was a "good possibility" though offered no details on progress.