By Alex Leary and Josh Zumbrun
WASHINGTON -- Moving to rekindle stalled trade talks with Beijing, President Trump joined with top technology industry executives Monday in a show of solidarity, as the U.S. moves to ease restrictions on sales to China's Huawei Technologies Co.
The chief executives of Qualcomm Inc., Intel Corp., Alphabet Inc.'s Google unit and four other companies met with Mr. Trump, who faces criticism from lawmakers and others demanding a hard stance toward the Chinese telecommunications giant.
"The CEOs expressed strong support of the president's policies, including national security restrictions on United States telecom equipment purchases and sales to Huawei," the White House said. "They requested timely licensing decisions from the Department of Commerce, and the president agreed."
Derek Scissors, a resident scholar at the conservative American Enterprise Institute, said the White House action suggests Mr. Trump sees the company mainly as leverage against Beijing and not a genuine threat.
"It was always a bargaining chip," said Mr. Scissors, who has urged U.S. officials to take more aggressive action against Huawei.
The chief executives attending the hourlong meeting in the Oval Office included Steven Mollenkopf of Qualcomm, Sundar Pichai of Google, Intel's Robert Swan and Chuck Robbins of Cisco Systems Inc. The chief executives of Micron Technology Inc., Western Digital Corp. and Broadcom Inc. were also at the meeting.
The U.S. move against Huawei wouldn't only hamstring the Shenzhen-based company but also deal a financial blow to U.S. chip makers and other companies that supply it. Broadcom, for example, cut its revenue estimate for the year by $2 billion following the Huawei blacklisting.
In a statement, Intel said it appreciated the chance to share its "perspective on economic issues, including how the current trade situation with China impacts the critical U.S. semiconductor industry."
Along with Mr. Trump, administration officials included Lawrence Kudlow, the president's top economic adviser, and Treasury Secretary Steven Mnuchin. Also attending were Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer, White House acting chief of staff Mick Mulvaney and Mr. Trump's adviser Jared Kushner, according to a White House official.
China has insisted that the U.S. lift its ban on Huawei, the world's largest maker of telecommunications gear, as a condition to returning to the trade talks that stalled in May.
Following the breakdown, the Trump administration added Huawei and its affiliates to an "entity list" that bars companies from supplying technology to the Chinese telecom giant without a license, citing national security reasons.
Clete Willems, who recently left as White House trade negotiator, said easing restrictions on Huawei makes sense as long as U.S. security isn't compromised.
"When we say national security, we should mean national security," Mr. Willems said. "Otherwise, we'll have China turning around and saying they are doing things for national security purposes where it's not justifiable."
Still, any more easing up on Huawei will draw fire from China hawks in Congress.
"I strongly discourage any American company from seeking license to deal with Huawei," Sen. Tom Cotton (R., Ark.) said last week. He helped introduce legislation to keep Huawei on the Commerce Department's "entity list" that serves as a blacklist for sales.
Under pressure from China's president, Xi Jinping, President Trump agreed during the Group of 20 summit in Japan last month to grant some exceptions in cases that don't affect national security.
Beijing had insisted that the U.S. back off on Huawei as a condition for getting back to the bargaining table, but Mr. Trump's decision triggered backlash among some Republicans and Democrats who want a tougher stance toward China.
Commerce Secretary Wilbur Ross said earlier in July that licenses would be granted for companies to make sales to Huawei in cases where there is "no threat to U.S. national security." However, the department provided no information about how quickly such licenses might be granted.
The Commerce Department declined to provide information Monday on the licensing process, including how many requests have been received. The Wall Street Journal reported this month that Treasury Secretary Mnuchin had encouraged U.S. suppliers to seek exemptions so they could make sales to Huawei.
Meanwhile, the Washington Post reported Monday that Huawei secretly helped North Korea build a national wireless network, potentially violating U.S. export controls, as Huawei uses U.S. technology in its components.
"We'll have to find out," the president told reporters when asked about the report. "Our relationship with North Korea is very good. We've established a good relationship with Kim Jong Un."
Sen. Marco Rubio (R., Fla.), among the China critics in Congress, used that report to question why Huawei should be given any latitude. "Why anyone in the U.S. govt would consider doing anything to make it easier for #Huawei to operate is beyond me," he tweeted Monday afternoon.
As the U.S. considers special licenses for Huawei, China appeared to be taking steps to increase purchases of U.S. farm products.
The Chinese state-run news agency, Xinhua, reported Sunday that some Chinese firms have asked U.S. companies about the prices of their agricultural products. These firms have also submitted applications to the State Council, requesting the cabinet remove the tariffs imposed on these goods so that the companies may make these planned purchases, the report said, citing unnamed government agencies.
The report didn't say how much China will eventually buy from the U.S. or when the purchases will happen.
Xinhua and China Central Television also reported that the U.S. recently exempted 110 Chinese industrial imports from hefty tariffs and said it is encouraging U.S. companies to continue to provide goods for "relevant Chinese companies."
The reports didn't name Huawei, but getting the Trump administration's restrictions lifted to maintain the company's access to U.S. technology has been a priority for the Chinese government.
The two countries' top negotiators have made multiple phone calls since the two leaders met in Japan late last month but have released few details about the progress of trade talks, including when they are next going to meet.
Representatives of U.S. farm groups said they have not yet seen large and systemic purchases of agricultural goods from China, as President Trump and his advisers have signaled.
A few significant one-time purchases have occurred: China made a large purchase of soybeans shortly before the Xi-Trump meeting; the U.S. made a first-of-its-kind large rice sale to China earlier this month; and China made large sorghum purchases in the second week of July, according to U.S. Department of Agriculture data.
Liyan Qi in Beijing and John D. McKinnon in Washington contributed to this article.
Write to Alex Leary at email@example.com and Josh Zumbrun at Josh.Zumbrun@wsj.com
(END) Dow Jones Newswires
July 22, 2019 21:08 ET (01:08 GMT)
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