White House economic advisor Larry Kudlow responded Sunday to criticism of President Donald Trump's controversial decision to allow Chinese telecom giant Huawei to buy US products, part of a truce Trump struck with Chinese President Xi Jinping at the G-20 summit in Japan over the weekend to ease trade war tensions.
Kudlow said the administration has not removed Huawei from the blacklist that largely blocks the company from buying American products. Instead, the Commerce Department will simply grant more licenses to allow U.S. companies to sell products to Huawei so long as those sales pose no threat to national security, Kudlow said.
"This is not a general amnesty, if you will," Kudlow said in an interview with Fox News Sunday. "Huawei will remain on the so-called entity list where there are serious export controls and in national security inferences or suggestions there won't be any licenses."
.@larry_kudlow on the President allowing Huawei to be used in some U.S. businesses #FNS
Trump said he made the decision to allow Huawei to buy US products at the request of American "high tech companies." The president said his administration will meet to more fully discuss the plan.
"One of the things I will allow, however, is — a lot of people are surprised we send and we sell to Huawei a tremendous amount of product that goes into a lot of the various things that they make — and I said that that's OK, that we will keep selling that product," Trump said at the G-20 summit.
Trump's decision to allow more sales to Huawei has been criticized by Republicans. Sen. Marco Rubio said Congress should put restrictions back on Huawei by passing legislation with a "large veto proof majority" if Trump rolls them back.
If President Trump has in fact bargained away the recent restrictions on #Huawei, then we will have to get those restrictions put back in place through legislation. And it will pass with a large veto proof majority.
The Semiconductor Industry Association -- which represents 95% of the U.S. semiconductor industry including chip companies like Broadcom, Qualcomm and Intel -- reacted positively to Trump's truce with Xi in the trade war, but said it wanted more details about the plan regarding Huawei
"We are encouraged the talks are restarting and additional tariffs are on hold and we look forward to getting more detail on the president's remarks on Huawei," said John Neuffer, president and CEO of the organization.
Trump's decision to blacklist Huawei reportedly forced semiconductor companies to cut ties with the Chinese telecom and caused a sell-off in chip stocks. All but one component of VanEck Vectors Semiconductor ETF were at correction levels or worse and nearly half of the 25 stocks were at bear market levels the week after the blacklist was announced.
The ETF recovered and is now up more than 10% over the past month on various indications that the Trump administration would scale back some of the restrictions on Huawei.
The blacklist has hurt Huawei. CEO and founder Ren Zhengfei said the company is cutting production and expects a $30 billion hit over the next two years due to the restrictions. Huawei also announced that it is scrapping a new laptop.
Trump declared a national emergency over threats to U.S. technology on May 15, and the Commerce Department subsequently added Huawei to a blacklist, which blocks U.S. companies from selling or transferring technology to Huawei unless they are granted a special license.
Washington is also seeking the extradition of Huawei CFO Meng Wanzhou from Canada on charges of bank and wire fraud related to allegations that the company skirted U.S. sanctions against Iran. Meng is the daughter of Huawei's founder and CEO Ren.
The U.S. has accused Huawei of essentially being an arm of Chinese intelligence and has sought to pressure other countries to limit business with the company.