Stephen Roach of Yale University.
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“The U.S. has not made a case against Huawei on national security grounds in any way whatsoever, there’s a lot of innuendo and assumption that’s been made, which is pretty consistent with the entire case that the U.S. has made on the Section 301 allegations against China, ” he told CNBC’s “Squawk Box.”
“This administration does not do fact-based policy, it does politics-based policy and that’s likely to continue to be the case with Huawei and even the possible imposition of further tariffs,” said Roach, who’s a former chairman of Morgan Stanley Asia.
Washington, in imposing tariffs on Chinese products, invoked Section 301, a law that allows the U.S. executive branch to take action against unfair trade practices by other countries — a move that Roach had also questioned previously.
Tensions between the U.S. and China escalated in May as negotiations for a trade deal broke down. But Trump and Chinese Xi Jinping, after meeting last month at the G-20 summit in Osaka, Japan, agreed that both sides would resume talks.
But investors shouldn’t hold out for both sides to reach a deal before the 2020 presidential elections in the U.S., said Roach.
“The likelihood that Osaka paves the way to a meaningful trajectory towards a deal over the near term I think is probably over-optimistic,” he said. “We’re back to a framework that was existing in early May that got us no where.”
— Reuters and CNBC’s Arjun Kharpal contributed to this report.