President Donald Trump said on Friday the U.S. is done doing business with Chinese telecom giant Huawei as the trade war continues to escalate.
“We are not going to do business with Huawei… And I really made the decision. It’s much simpler not doing any business with Huawei…That doesn’t mean we won’t agree to something if and when we make a trade deal,” Trump said.
“We are talking to China; we are not ready to make a deal, but we’ll see what happens…China wants to do something, but I’m not doing anything yet. Twenty-five years of abuse. I’m not ready so fast,” Trump said.
Trump’s decision on Huawei came after China halted buying American agricultural products in retaliation for Trump’s surprise tariffs threat last week. China also allowed its currency to drop against the dollar to a key level unseen since 2008.
Chip stocks took a big hit following the news. Micron Technology dropped more than 3% on Friday while Advanced Micro Devices traded nearly 2% lower. Skyworks Solutions fell more than 4%. Huawei has been a big customer of these chip makers.
The administration blacklisted Huawei in May for national security concerns, preventing it from buying U.S. chips. But Trump last month agreed to give “timely licensing decisions” to allow a slew of tech companies including Google and Broadcom to sell to the Chinese telecom giant.
Bloomberg News reported earlier Friday the U.S. is delaying granting licenses for companies to restart sales to Huawei after China’s retaliation measures.
Trump last week abruptly ended the cease-fire with China by announcing a 10% tariffs on $300 billion worth of Chinese goods, claiming China failed to buy U.S. farm goods in “large quantities” as it promised. The threat sent shock waves through the markets, causing the S&P 500 to suffer its worst day of the year on Monday as the trade war intensified.