Beijing Hints Washington's "Nuclear Option" Against Huawei Could Crash Trade Talks

Beijing has already responded to President Trump's blacklisting of Huawei and dozens of its affiliates via Hu Xijin, one of its most closely watched English-language mouthpieces...

...and Huawei has also released a statement of its own, saying it is"ready and willing to work with the US government" to offer reassurances about safety and security.

But early Thursday, the Foreign Ministry, which along with the MOFCOM (the Ministry of Commerce), is perhaps the most closely watched by the West, issued the most strongly worded statement yet, blasting the White House's tactics as "disgraceful and unjust" and hinting that the Huawei ban could hurt the ongoing trade negotiations.

Shortly after President Trump signed an executive order banning Huawei and other foreign telecoms companies from doing business with US companies, while the Department of Commerce said it planned to add Huawei to its "Entity List," which could stop US companies from dealing with Huawei. If applied, these restrictions could seriously impact the company's operations. When Washington slapped a "components ban" on another Chinese telecoms giant, ZTE, last year, the ban hammered the company's stock and provoked a short-lived selloff in Chinese financial markets.

Lu Kang, the foreign ministry spokesman, warned that Beijing would take all necessary measures to safeguard its rights and the interests of Chinese businesses - which sounds like a threat to us - before suggesting that the decision would make it harder for Beijing to trust Washington, which could redound upon trade negotiations.

"Negotiations and consultations, to have meaning, must be sincere."

"First, there must be mutual respect, equality and mutual benefit. Second, one’s word must be kept, and not be capricious."

It would be difficult to understate the seriousness of Washington's latest actions against Huawei. Bloomberg called it "the nuclear option."

The takeaway should be clear: Over the past year, the US has orchestrated the arrest of one of Huawei's top executives (who also happens to be the daughter of the company's billionaire founder)and managed to convince at least some of its allies (New Zealand, Australia) to block the use of Huawei equipment in their 5G networks. But there's no question: Beijing sees this as an attack - industrial sabotage, as that BBC reporter called it. So whatever retaliation the Chinese are planning, it'll likely be more consequential than anything they've done in the past.