Donald Trump upped the ante in tussle against China for dominance of 5G technology networks.
Instead of an outright ban on US sales by Huawei and ZTE; the executive order gives greater power to the Commerce Department in reviewing purchases and products by firms connected to adversarial countries, including China.
“Technology or services “designed, developed, manufactured or supplied” by companies subject to the jurisdiction of U.S. rivals, “augments the ability of foreign adversaries to create and exploit vulnerabilities in information and communications technology and services, with potentially catastrophic effects,” said the order.
- President Trump declared a national emergency citing threats against information and communications technology and services.
- The move limits Huawei Technologies ability to access the US market and American suppliers.
- Earlier, US Federal Commission blacklisted China Mobile due to concerns over national security.
- Trump administration has voiced an international campaign for months against alleged security risks in Huawei’s phones.
- The bans risk a response from China as Trump keeps up the pressure Xi Jinping to agree to a wide-ranging trade deal.
The US president signed an order to restrict Chinese telecoms Huawei and ZTE from operating within the US. The Department of Commerce too has blacklisted Huawei to prohibit it from doing business with American companies.
Trump also threatened to impose tariffs on almost all imports from China. Last week, US hiked duties on $200 billion worth of Chinese products.
However, the executive order took care to not directly name any countries or companies.
What this means for trade with Huawei
US companies doing business with Huawei will now need a special license. ZTE experienced a similar ban last year which almost forced the company to cease operations before Trump intervened.
US prosecutors accused Huawei on charges of trade-secret theft. Canada arrested a key executive on sanctions charges on US’ behest. Diplomats rooting for ban on Huawei from 5G networks claim that Huawei is subjected to Chinese law which demands cooperation with security services.
Huawei insists that it is independent of any influence by the Chinese government. It claims that none of its products are used for spying.