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Westlake Legal Group > Customs (Tariff)  > Trump Contradicts Advisers on China Technology Fears

Trump Contradicts Advisers on China Technology Fears

Westlake Legal Group 18DC-TRUMPCHINA-01-facebookJumbo Trump Contradicts Advisers on China Technology Fears United States Politics and Government Protectionism (Trade) Politics and Government International Trade and World Market Customs (Tariff)

WASHINGTON — President Trump publicly objected on Tuesday to efforts within his own administration to restrict the sales of American technology to China because of national security concerns, insisting that such fears are an “excuse” and that the United States is open for business.

The comments, posted on Twitter, appeared to represent a striking reversal of the Trump administration’s aspirations to curb China’s ascent as a global leader in technology and came as cabinet officials were scheduled to meet later this month to discuss restrictions on China.

That Feb. 28 meeting was expected to include a discussion about whether to halt sales to China of an aircraft engine produced in part by General Electric by blocking its license to export the technology. Officials were also expected to consider new rules that would further curtail the ability of Huawei, the Chinese telecom giant, to have access to American technology.

But on Tuesday, Mr. Trump seemed to pre-emptively scuttle such moves and two people familiar with the matter said that the meeting was on hold and that U.S. would not block GE’s ability to sell jet engine parts to China.

“The United States cannot, & will not, become such a difficult place to deal with in terms of foreign countries buying our product, including for the always used National Security excuse, that our companies will be forced to leave in order to remain competitive,” Mr. Trump wrote. “We want to sell product and goods to China and other countries.”

The president went on to say that if the United States does not sell its products for national security reasons, then other countries will step in and do so. Mr. Trump explicitly referenced the jet engine sales.

“As an example, I want China to buy our jet engines, the best in the World,” he said. “I have seen some of the regulations being circulated, including those being contemplated by Congress, and they are ridiculous.”

Mr. Trump said that he has made this sentiment clear to everyone in his administration.

The administration’s efforts to restrict the flow of American technology to China has increasingly triggered objections from companies, who say it undermines their ability to compete on a global scale. Firms say they have already taken steps to limit the American components in their products and may begin to do more research and development outside the United States.

General Electric, in response to media reports on Saturday about the administration’s review of its export license, said in a statement that it would comply with any requirements imposed by the United States but downplayed concerns about the risks of sales to China.

“We aggressively protect and defend our intellectual property and work closely with the U.S. government to fulfill our responsibilities and shared security and economic interests,” General Electric said in a statement. “G.E. has provided products and services in the global marketplace for decades.”

Geng Shuang, spokesman for China’s foreign ministry, criticized the U.S. proposal to halt the jet engine deliveries during a news conference on Tuesday.

“It would expose certain US officials’ ignorance in science and technology, disregard of the market principle, and anxiety with China’s development,” he said during a briefing. “It will be another example of the US using political means to undermine bilateral commercial cooperation and wantonly oppress China.”

Mr. Trump’s description of national security as an “excuse” for interfering in international commerce is surprising given the president’s decision to routinely link economic and national security. The president has cited the need to protect national security in his decision to impose tariffs on foreign metals and to consider placing them on foreign autos. The U.S. has also cited national security in expanding its ability to block international mergers and acquisitions.

The shift in position is also notable given the administration’s ongoing efforts to crack down on Huawei, the Chinese telecom giant that is on a government blacklist. Administration officials were expected to further restrict American sales to Huawei by closing a loophole that has allowed American sales to continue. While the Pentagon initially opposed the effort, fearing it could hurt defense suppliers, it has now reversed its position amid pressure from other administration officials.

John Neuffer, president and chief executive of the Semiconductor Industry Association, welcomed the administration’s shift in tone.

“We applaud President Trump’s tweets supporting U.S. companies being able to sell products to China and opposing proposed regulations that would unduly curtail that ability,” he said in a statement. “As we have discussed with the administration, sales of nonsensitive, commercial products to China drive semiconductor research and innovation, which is critical to America’s economic strength and national security.”

Julian Barnes and David McCabe contributed reporting.

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