U.S. President Donald Trump said Friday that the U.S. won’t do business with Chinese telecom giant Huawei as the trade war between the world’s two largest economies continues to escalate, sending markets south again.
“We are talking to China. We are not ready to make a deal, but we’ll see what happens. China wants to do something, but I’m not doing anything yet. Twenty-five years of abuse. I’m not ready so fast.”
“We are not going to do business with Huawei. And I really made the decision. It’s much simpler not doing any business with Huawei. That doesn’t mean we won’t agree to something if and when we make a trade deal,” Trump said. “We are talking to China. We are not ready to make a deal, but we’ll see what happens. China wants to do something, but I’m not doing anything yet. Twenty-five years of abuse. I’m not ready so fast.”
The president’s remarks sent the markets downward again. By lunchtime on the East Coast on Friday, the S&P 500 was down 1.1%, the Dow was down 0.8% and the Nasdaq had fallen 1.4% in an already rough week for investors. However, as the day went on the markets rallied. By 3:10 p.m. EDT Friday, the Dow was up 22 points. The S&P and Nasdaq recovered some but were still down 0.3% and 0.6%, respectively.
The latest salvo in the ongoing trade war came after China halted all purchases of U.S. farm and agriculture products. China also allowed its currency, the yuan, to fall to the politically sensitive exchange rate of 7.0-to-$1, the lowest level since 2008.
The Trump administration originally blacklisted Huawei from U.S. markets in May for national security reasons, and as a ploy in the trade war, preventing the Chinese telecom giant from buying U.S. chips. Recent reports also showed Huawei was working with the North Korean government to build and maintain a commercial wireless network.
But last month, Trump agreed to give “timely licensing decisions” to allow tech companies like Google and Broadcom to start selling chips to Huawei again.
However, Bloomberg reported last week that the U.S. stalling on giving out the aforementioned licensing decisions, a move that was a direct retaliation of China’s decision to stop buying U.S. agricultural goods.
Before heading leaving Friday for the Hamptons for a fundraiser, Trump said planned September meetings with China might even be called off.
“We’ll see whether or not we keep our meeting in September,” he said. “If we do, that’s fine. If we don’t, that’s fine.”
