WASHINGTON (Reuters) - U.S. Commerce Secretary Wilbur Ross said on Monday the U.S. government will extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from U.S. companies so that it can service existing customers, even as nearly 50 of its units were being added to a U.S. economic blacklist.
The department said in a statement the 90-day extension “is intended to afford consumers across America the necessary time to transition away from Huawei equipment, given the persistent national security and foreign policy threat.”
“As we continue to urge consumers to transition away from Huawei’s products, we recognize that more time is necessary to prevent any disruption,” Ross said in a statement, confirming an expected decision first reported on Friday by Reuters.
He also said he was adding 46 Huawei affiliates to the so-called “Entity List” - a list of companies effectively banned from doing businesses with U.S. customers - raising the total number to more than 100 Huawei entities that are covered by the restrictions.
Related slideshow: US-China trade war (Provided by Photo Services) >Full Screen 1/25 SLIDES © cybrain/Getty Images
Two of the biggest economies in the world – the U.S. and China – are caught in the throes of a bitter and potentially catastrophic (for themselves and the world) trade war. Take a look at this timeline to understand the progression of the dispute between Washington, D.C. and Beijing.
(Note: All figures in U.S. dollars unless otherwise indicated. Please check out our >Currency Converter for the latest values.) Click or swipe to view the timeline. 2/25 SLIDES © Artur Widak/NurPhoto/Getty Images April 2017: Trump investigates steel imports
One of U.S. President Donald Trump’s biggest campaign promises was to bring manufacturing jobs back to the country. In April, after becoming president, Trump directed the Commerce Department to determine whether the scale of import of steel from China (and other countries) posed a threat to national security.
When announcing the investigation, Trump said: "For decades America has lost our jobs and our factories to unfair foreign trade. And one steel mill after another has been shut down, abandoned, and closed. And we're going to reverse that."
3/25 SLIDES © JIm Watson/AFP/Getty Images August 2017: Trump targets China's 'unfair trade practices'
A few months later, Trump expanded the scope of investigation, calling on U.S. Trade Representative Robert Lighthizer (L) to decide on a probe of "unfair Chinese trade practices" in general. The Executive Order focused on alleged theft of American intellectual property through spying and hacking.
In response, the Chinese Commerce Ministry said: “… any actions of trade protectionism from the U.S. side would be harmful to the bilateral trade and business relationship and the interests of companies on both sides."
4/25 SLIDES © Guang Niu/Getty Images August 2017: China responds through state media
In a sign of deteriorating relations between the two countries, China’s Ministry of Foreign Affairs hit out at Trump for launching the investigations and trying to use them to pressure Chinese President Xi Jinping into supporting the U.S. in its efforts to control North Korea.
The state-run China Daily newspaper wrote: "His idea of exploiting trade as a bargaining chip in dealings with China dates back to the campaign trail. But instead of advancing the United States' interests, politicizing trade will only acerbate the country's economic woes, and poison the overall China-U.S. relationship."
5/25 SLIDES © Chris Kleponis/Pool/Getty Images January 2018: U.S. slaps tariffs on solar panels and washing machines
Undeterred by Beijing’s warnings, the Trump administration initiated its first major trade action against China – a 30 per cent tax on imported solar panels (the majority of these come from China). In addition, a 20 per cent tax was levied on large residential washing machines.
In his statement, Lighthizer (pictured) said: “The President's action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers, and businesses in this regard.”
6/25 SLIDES © AFP/Getty Images January 2018: China blasts new tariffs
On Jan. 23, China’s Commerce Ministry issued a statement condemning the U.S. move to tax solar panels. Part of the statement said: “China hopes the U.S. will exercise restraint in using trade restrictions.” Beijing also aid it would “resolutely defend its legitimate interests.”
The Trump administration’s move to tax the import of washing machines upset South Korea as well. Seoul’s Trade Minister, Kim Hyun-chong, said the move was an “excessive and a clear violation of World Trade Organization (WTO) rules.
7/25 SLIDES © SafakOguz/Getty Images March 2018: U.S. imposes tariffs on steel and aluminum
On March 9, Trump imposed a 25 per cent tariff on steel imports and a 10 percent tariff on aluminum. The tariffs would impact every country exporting either material to the U.S., with the exception of Canada and Mexico. Trump said: “America will remain open to modifying or removing the tariffs for individual nations as long as we can agree on a way to ensure that their products no longer threaten our security.”
China responded by calling the tariffs “a serious attack on normal international trade order” and said it is “firmly opposed” to the move.
8/25 SLIDES © ShutterStock April 2018: China hits back with its tariffs
On April 2, Beijing announced tariffs on nearly $3 billion of U.S. imports. These tariffs included a 15 percent duty on products like fruits, wine, nuts and steel pipes. In addition, China also levied a 25 per cent tax on goods like pork and recycled aluminum. The latter move alarmed the U.S. National Pork Producers Council, who claimed the $1.1 billion in exports to the Asian giant would be negatively impacted.
China’s Ministry of Commerce said it hoped the U.S. would withdraw its tariffs “as soon as possible so that the trading of products between China and the United States will return to a normal track.”
9/25 SLIDES © luchschen/Getty Images April 2018: U.S. taxes 1,300 Chinese products
The two countries continued to trade blows, with the U.S. adding 1,300 more items to the list of taxed goods. The products taxed included those from the aerospace and medical industries, both of whom were the subject Trump’s 2017 investigation into China’s “unfair trade practices.” The sum total of Chinese exports to be taxed was $50 billion.
The decision was criticized by the U.S. Chamber of Commerce, whose executive vice president, Myron Brilliant, said that although the move to restore balance in trade was correct, “… imposing taxes on products used daily by American consumers is not the way to achieve those ends.”
10/25 SLIDES © Anucha Sirivisansuwan/Getty Images April 2018: China retaliates with tariffs worth $50 billion
China then announced plans to impose a 25 per cent tariff on U.S. exports worth $50 billion. The list of products to be affected included soybeans, chemicals, aircraft and automobiles. At the time, there was confusion over the date on which these tariffs would come into effect. In response, China’s vice finance minister, Zhu Guangyao, said the intervening period could be used as a “time to negotiate and compromise.”
11/25 SLIDES © Li Huisi/China News Service/VCG/Getty Images April 2018: US threatens $100 billion of tariffs
An apparently frustrated Trump then threatened a further (and steeper) range of tariffs. On April 6, he said: “In light of China’s unfair retaliation, I have instructed the [United States Trade Representative] to consider whether $100 billion of additional tariffs would be appropriate.” China’s response, via Commerce Ministry spokesperson Gao Feng (pictured), was to say: “We are prepared and have already formulated very detailed countermeasures.”
Trump’s announcement was criticized by members of the Republican party, with Nebraska senator Ben Sasse calling it “the dumbest possible way to do this.”
12/25 SLIDES © Johannes Eisele/AFP/Getty Images April 2018: U.S. bans Chinese tech giant
Washington, D.C.’s next move was against Chinese telecom giant ZTE. The firm was banned from purchasing components from U.S. companies. The U.S. Commerce Department claimed ZTE lied about punishing employees who violated sanctions against North Korea and Iran and slapped a seven-year ban on the company.
Meanwhile, the U.K. government made a similar move, warning its companies from using the Chinese one’s equipment and services.
13/25 SLIDES © Mailson Pignata/Getty Images April 2018: China's 179 per cent sorghum tax
The following day, China’s Commerce Ministry announced a staggering 179 per cent fee on sorghum imports from the U.S. The grain is used in animal feed but is also popular in the country for making a local liquor. China imported over $960 million of sorghum in 2017, according to data from CNN.
14/25 SLIDES © Brendan Smialowski/AFP/Getty Images April 2018: Both sides show interest in talks
In the first sign of a potential thaw in relations, on April 21 U.S. Treasury Secretary Steven Mnuchin (pictured) said a trip to China was possible and that he was “cautiously optimistic” a trade deal could be agreed between the two countries.
In response, on April 22, China’s Commerce Ministry said: “China has received a message from the U.S. about its willingness to hold bilateral trade talks in Beijing. China welcomes this move."
15/25 SLIDES © cbarnesphotography/Getty Images May 2018: First round of talks
Talks between senior U.S. and Chinese officials began in May, in Beijing. They were described by the White House as “frank discussions.” The Chinese were more circumspect, with official news agency Xinhua saying: “Both sides realized there are some relatively big differences on some issues. And more work needs to be done to achieve more progress.”
16/25 SLIDES © Jaap Arriens/NurPhoto/Getty Images May 2018: Trump tweets in favor of ZTE
On May 13, Trump tweeted: “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”
A spokesperson for China’s Foreign Ministry responded: “We very much appreciate the positive statement from the U.S. side on ZTE and maintain close communication with them on the issue.”
17/25 SLIDES © Greg Baker/AFP/Getty Images May 2018: Rumours of Chinese purchases surface up
On May 17, U.S. officials told CNN Beijing had proposed a boost in Chinese purchases of U.S. products by nearly $200 billion, in order to address trade imbalances between the two nations.
The following day, Lu Kang (pictured) responded, “These rumours are not true.” At the same time, China also announced it was removing the 179 per cent tax on the import of U.S. sorghum.
18/25 SLIDES © Win McNamee/Getty Image May 2018: Mnuchin says trade war 'on hold'
Four days later, Mnuchin told Fox News: “We're putting the trade war on hold. We have agreed to put the tariffs on hold while we try to execute the framework.” The statement came after news U.S. and China had agreed to not impose tariffs while talks were ongoing.
19/25 SLIDES © kokouu/Getty Images May 2018: China reduces tariffs on imported cars
In response, China then announced, with effect from July 1, a reduction in import duties on passenger cars from the U.S., from 25 per cent to 15 per cent. The decision was one of some promises made by Jinping to Trump and included a significant reduction of fees on imported auto parts as well.
20/25 SLIDES © Chip Somodevilla/Getty Images May 2018: U.S. revives tariff threats
What followed was a surprising revival of tariff threats against Beijing. On May 29, the White House announced it would go ahead with an earlier plan to levy a 25 per cent duty on $50 billion of Chinese goods “containing industrially significant technology.”
In its statement, the U.S. government said: “The United States will request that China remove all of its many trade barriers, including non-monetary trade barriers, which make it both difficult and unfair to do business there.”
21/25 SLIDES © Ng Han Guan, File/AP Photo May 2018: China 'not afraid of fighting trade war'
Beijing issued a strong response to the new threats, with Foreign Ministry spokesperson Hua Chunying saying: “We want to reiterate that we don't want a trade war, but we aren't afraid of fighting one. If the U.S. insists on acting arbitrarily and recklessly, China will take firm and powerful measures to safeguard its own legitimate rights.”
Beijing also decried what it saw as U.S. efforts to unsettle China ahead of talks with American Commerce Secretary Wilbur Ross, saying: In international relations, an about-face or constant change of positions is bound to damage or squander a country’s credibility.”
22/25 SLIDES © Andy Wong/AFP/Getty Images June 2018: Wilbur Ross holds talks in Beijing
Ross met with Chinese vice premier Liu He in Beijing over the first week of June. At the end of that discussion, China said it would purchase U.S. products worth nearly $25 billion in 2018. The decision was seen as Beijing’s attempt to reduce the deficit in trade balances between the two countries – something Trump repeatedly pointed out in his relationship with China.
23/25 SLIDES © VCG/Getty Images June 2018: U.S. allows ZTE to return to business, if it pays a fine
On June 7, the U.S. government said it had reached a deal with Chinese firm ZTE that would allow the telecom giant to return to trading with American partners. The deal included the payment of a record $1.4 billion ($400 million in escrow) fine and proposed management changes.
24/25 SLIDES © Andrew Harrer-Pool/Getty Images July 2018: US slaps $34 billion duty
The Trump administration’s unpredictable handling of the trade issue took a new turn on July 6, with the U.S. slapping $34 billion of tariffs on products like farming plows and airplane parts. The government said a further $16 billion in tariffs could be imposed in two weeks or less.
The move was criticized by Robert Holleyman, a senior trade official who served under former president Barack Obama, who said: “Once these tariffs start going into effect, it’s pretty clear the conflict is real. If we don’t find an exit ramp, this will accelerate like a snowball going down a hill.”
25/25 SLIDES © Nicolas Asfouri/AFP/Getty Images July 2018: China hits back
The latest salvo in a rapidly escalating trade war was fired by China, who imposed a similar $34 billion of tariffs on 545 American products. Lu Kang confirmed the development, saying: “After the U.S. activated its tariff measures against China, China’s measures against the U.S. took effect immediately.”
The list includes Huawei affiliates in Argentina, Australia, Belarus, China, Costa Rica, France, India, Italy, Mexico and numerous other countries.
Ross said the extension was to aid U.S. customers, many of which operate networks in rural America.
“We’re giving them a little more time to wean themselves off,” Ross told Fox Business Network earlier.
Shortly after blacklisting the company in May, the Commerce Department initially allowed Huawei to purchase some American-made goods in a move aimed at minimizing disruption for its customers.
Huawei did not immediately comment on Monday.
The extension, through Nov. 18, renews an agreement continuing the Chinese company’s ability to maintain existing telecommunications networks and provide software updates to Huawei handsets.
The Commerce Department said on Monday it is now requiring the exporter, re-exporter, or transferor to obtain a certification statement from any Huawei entity prior to using the temporary general license.
Asked what will happen in November to U.S. companies, Ross said: “Everybody has had plenty of notice of it, there have been plenty of discussions with the president.”