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In Latest Move Against Huawei, Trump To Order New Restrictions On Foreign Telecom Companies

In what appears to be the US government’s latest salvo in its war against Huawei, President Trump is reportedly preparing to sign an executive order that would prohibit American firms from using equipment made by foreign telecom companies that pose a ‘security threat’, according to Bloomberg, which sourced its report to administration insiders.

The official who spoke with Bloomberg insisted the order wasn’t intended to single out any country or company, but anybody who has been following the ongoing spat with Huawei should instantly recognize that this simply isn’t true (though, with the trade negotiations at a very delicate impasse, we understand why the administration needs to maintain this pretense). Though Huawei and its fellow Chinese telecoms giant ZTE already face serious restrictions on selling their products in the US, Huawei still maintains a US subsidiary in Texas.

Huawei

The order, which could be signed as soon as Wednesday, wouldn’t outright ban sales to US entities, but it would grant the Commerce Department more authority to review products and purchases made by firms with connections to adversarial countries (we doubt that’s directed at Ericsson and Sweden).

China’s foreign ministry has already lashed out at the US over reports of the executive order.

“This is neither graceful nor fair,” ministry spokesman Geng Shuang said at a news briefing in Beijing. “We urge the U.S. to stop citing security concerns as an excuse to unreasonably suppress Chinese companies and provide a fair and equitable and non-discriminatory environment for Chinese companies to operate in the U.S.”

Washington has been campaigning for months to stop its allies around the globe from allowing Huawei products to be used in their 5G networks, but to little avail. Yesterday, Huawei promised to sign a “no spy” pledge to governments like the UK that are still deciding how much reliance on Huawei they are willing to stomach.

As Huawei pushes to assume a global leadership position in 5G, the US’s efforts to try and discredit the company have included successfully pushing for the arrest of its CFO, Meng Wanzhou, in Canada, on charges she helped the company violate US sanctions on Iran.

American lawmakers suspect Huawei’s equipment could be used for spying – and not without reason.

Just last month, Ars Technica found a backdoor like vulnerability in Huawei’s Matebook laptop series which could have allowed remote hackers to gain access to the system. Chinese law also could technically compel companies like Huawei to cooperate with authorities.

But even if the order is signed on Wednesday, it might not take effect for six months, as it would take time for the Commerce Department to “fashion an approach” to the order.

In the meantime, Verizon and other US telecoms firms are still way behind in the war to dominate the global market for 5G networking equipment.


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About The Author

Tyler Durden

Zero Hedge's mission is to widen the scope of financial, economic and political information available to the professional investing public, to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become, to liberate oppressed knowledge, to provide analysis uninhibited by political constraint and to facilitate information's unending quest for freedom. Visit https://www.zerohedge.com

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