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WASHINGTON — The U.S. and China are about to declare a pause in their trade war by signing an initial pact at the White House this week, but a continuing battle over technology is bound to keep relations between the two superpowers on edge.
The Trump administration’s immediate focus is tightening restrictions on Huawei Technologies Co., the giant Chinese telecommunications company that the White House and Congress view as a national security threat. The Commerce Department recently sent to the Office of Management and Budget new regulations that would largely eliminate a loophole that allowed U.S. companies to sell to Huawei from their overseas facilities, said people familiar with the actions.
Some lawmakers and national-security experts say Huawei’s equipment would allow Chinese leaders to spy on Americans, which the company has regularly denied. A Huawei spokesman didn’t immediately return a request for comment on the potential restrictions.
China hawks in Congress also have been pushing to limit sales to Huawei, and some are even calling for Washington to subsidize U.S. firms working on next-generation 5G wireless technology, given how much Beijing has subsided Huawei.
At the same time, a team of senior U.S. officials, including deputy national security adviser Matt Pottinger, earlier this week lobbied the U.K. to block local network operators from using equipment from Huawei and other Chinese vendors in their 5G networks. A British decision is expected shortly. More broadly, the National Security Council last week asked the Commerce Department to suggest regulations to restrict sales of any U.S. technology to China, according to people tracking the early-stage discussions.
An expanded version of this report appears on WSJ.com.
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