Trump order bans United States firms from dealing with Huawei

Nellie Chapman
May 18, 2019

Trump, citing national security concerns, signed an executive order that's expected to bar US imports of equipment made by Huawei and another Chinese company, ZTE Corp.

Sir Richard's intervention comes as US President Donald Trump signed an executive order effectively banning American firms from using foreign telecoms deemed to pose a threat to national security.

Huawei, meanwhile, has always disputed claims that its equipment can be used for spying purposes, relying on partners including European and United States tech companies to make its case. But the Department of Commerce soon after on the same day added the company and 70 affiliated businesses to its "Entity List". USA companies looking to sell to companies on the Entity List are required to get approval by the US government. "China will take all the necessary measures to resolutely safeguard the legitimate rights of Chinese firms", Gao told reporters.

A government spokesman said individual countries were taking "a range of different approaches" to the issue of 5G security.

Huawei has spearheaded China's campaign to develop its own high-end technologies to reduce reliance on foreign imports, and such efforts have taken on urgency after USA sanctions on ZTE.

"The U.S. can allow some companies to sell to Huawei while ultimately holding the cards".

"First, it is not the best way to defend your national security - we don't need it".

A Trump administration decision to restrict the sale of USA technology to Chinese telecommunications company Huawei will disrupt global supply chains, say analysts, ramping up pressure on US allies reluctant to join in efforts to shut out Huawei from advanced 5G mobile networks.

However, the Commerce Department hasn't yet announced all the exact details of the new restrictions, so it's hard to make specific predictions of what products will be affected.

The trade war has turned into a tech war, with the U.S. effectively barring Huawei from the U.S. market.

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The Trump administration on Wednesday effectively blocked Huawei products from being used in USA networks.

Mr Ren's military background, Communist Party membership, and Huawei's opaque culture have long fuelled suspicions of Chinese state control, as has the widely held belief that no company in such a strategic industry could achieve such heights without Beijing's involvement.

Analysts said Huawei can likely pivot to other semiconductor sources, plus its own rapidly advancing chipsets, and that the United States campaign could bring pushback from European allies whose carriers rely on Huawei equipment.

The two countries are having a trade war that is partly about a struggle for worldwide economic and technological power.

Huawei has said its work does not pose any threats and that it is independent from the Chinese government.

Many see the US ban implemented this week as a strong message to European partners who are still considering working with Huawei to establish their next generation telecom infrastructure.

The ICT executive order and Huawei's addition to the Entity List are nominally unrelated to the ongoing "trade war", involving tit-for-tat tariffs imposed by China and the United States - but the new development must be read in that context.

In a paper last month, they said the company is owned by a shadowy trade union, noting that in China such unions are invariably government-controlled.

It will be tough for Huawei too, the person said, noting none of its USA suppliers "can be replaced by Chinese ones, not within a few years, at least".

The Trump administration's decision to target and potentially cripple Huawei garnered a sharp rebuke on Thursday. In 2016, Huawei's smaller rival ZTE Corp. was added to the entity list over allegations it organized an elaborate scheme to hide its re-export of USA items to sanctioned countries. "However, it is regrettable that the USA side unilaterally escalated trade disputes, which resulted in severe negotiating setbacks".

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