President Donald Trump signed an executive order Wednesday that stands to restrict Chinese telecommunication companies Huawei Technologies Co. and ZTE Corp. from selling their equipment in the U.S., ratcheting up the battle for control over new 5G technology networks.
The order, which didn't name any countries or companies, declares a national emergency relating to threats against information and communications technology and services.
The U.S. is engaged in a global campaign to keep Chinese tech companies out of advanced 5G networks promising faster connections, enabling uses such as autonomous vehicles and remote surgery. Huawei is pushing to take a global leadership position, but many American officials suspect the company's products could be used by Beijing to spy on Western governments and companies.
The order doesn't outright ban U.S. sales by the companies, but would give greater authority to the Commerce Department to review products and purchases by firms connected to adversarial countries, including China.
An administration official said Tuesday that the order is unrelated to the recent escalation of the trade conflict with China.
The administration has been urging allies to analyze risk before buying gear, Robert Strayer, deputy assistant secretary for cyber policy at the State Department, told the Senate Judiciary Committee at a hearing on Tuesday.
"We are concerned that China could compel actions by network vendors to act against the interests of U.S. citizens and citizens of other countries around the world," Strayer said.
The U.S. says Chinese law compels Huawei to cooperate with Beijing's espionage agencies. U.S. officials said Huawei can build vulnerabilities, or back doors, into equipment.
Both Huawei and ZTE have also been targeted by the U.S. for alleged schemes to dodge American sanctions on Iran. Canadian authorities last December arrested Huawei's Chief Financial Officer Meng Wanzhou at the request of the U.S., which seeks her extradition over allegations of violating Iran sanctions.
Ren Zhengfei, the company's founder and Meng's father, has denied espionage allegations and a link to China's government. Meng remains under house arrest in Vancouver while the legal proceedings unfold.
The administration official said Wednesday that the Commerce Department was expected to take as long as six months to fashion an approach to the order, so there might not be an immediate effect. The order might eventually name specific companies or countries as Commerce carries out the process.
The U.S. has been trying without success to persuade other governments to exclude equipment made by Huawei from super-fast 5G mobile networks that will connect billions of devices.
Last week, the U.S. Federal Communications Commission barred China Mobile Ltd. from the U.S. market over national-security concerns and said it was opening a review of other Chinese companies.
Business on 05/16/2019