Mnuchin says Huawei not a 'chess piece' in US-China trade deal

Mnuchin says Huawei not a 'chess piece' in US-China trade deal
© Greg Nash

Treasury Secretary Steven MnuchinSteven Terner MnuchinOn The Money — Presented by Wells Fargo — Senate approves Trump trade deal with Canada, Mexico | Senate Dems launch probe into Trump tax law regulations | Trump announces Fed nominees Senate Democrats launch investigation into Trump tax law regulations Treasury watchdog to investigate Trump opportunity zone program MORE said that negotiations between the U.S. and China over issues around telecommunications giant Huawei are “ongoing,” stressing the Chinese company will not be used as a “chess piece” in the trade deal being signed Wednesday.

I don’t view Huawei as a chess piece,” Mnuchin said during an interview on CNBC’s "Squawk Box." “What I do think, and we have said this repeatedly across the administration: our national security issues are our primary concern. So, when it comes to our government networks, when it comes to sophisticated business networks, military networks and networks of all of our allies, we want to make sure that those networks are fully secure.”

Mnuchin’s comments came hours before U.S. officials were set to sign a "phase one" trade deal with China. A second deal, addressing issues such as cybersecurity and tech — including potentially Huawei — is still to come.

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“Huawei is not part of the economic dialogue, it is part of the national security dialogue, which is ongoing,” Mnuchin told CNBC. “These are going to be negotiated separately.”

Federal concerns around Huawei have built over the past year, as the Trump administration and bipartisan members of Congress have taken steps against the telecommunications company, which is one of the largest telecom product manufacturers in the world.

The Commerce Department added Huawei to its entity list last year, effectively banning U.S. groups from doing business with Huawei, although the company’s formal addition to the list has been delayed multiple times.

The Federal Communications Commission (FCC) also designated Huawei a national security threat at the end of 2019, and banned American companies from using FCC funds to purchase equipment from groups deemed a national security threat.

On Capitol Hill, multiple bipartisan bills have been introduced seeking to limit the use of Huawei by the federal government and to promote innovation in the 5G wireless field. The National Defense Authorization Act for both 2019 and 2020 also included restrictions on Huawei.

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Concerns around the company largely stem from a 2017 Chinese intelligence law that requires all China-based companies to help with national intelligence work. 

Beyond Huawei, other technology issues around intellectual property will be addressed by either the phase one or phase two trade deals, along with other cybersecurity issues, according to Mnuchin.

“I think a significant amount of the technology issues are in Phase One,” Mnuchin said on Wednesday. “There are certain areas of other services away from financial services that will be in phase two. There’s certain additional cyber security issues that will be in phase two. So, there are still more issues to deal with. And we’ll address those.”