Amid escalating trade tensions, US blacklists Chinese telecom giant Huawei
Huawei depends on American companies for chips for its equipment and its smartphones use Google’s Android operating system and some American phone companies operating in rural areas have depended on cheap telecommunications equipment from the Chinese giant.
US President Donald Trump issued an executive order on Wednesday prohibiting the sale of telecommunications equipment from “foreign adversaries”, and shortly after, Chinese telecom giant Huawei was put on a list of entities with whom American firms are prohibited from doing business.
The actions came amid escalating trade tensions between the United States and China, who broke off talks last week after coming “close”, as US officials have said, to a historic deal.
Trump’s executive order, which had long been expected, declared a “national emergency to deal with the threat posed by the unrestricted acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries”.
It did not name any entity and senior administration officials told reporters in a background conference call that it was “company and country agnostic”.
Shortly after, the US department of commerce’s bureau of industry and security announced it was adding Huawei Technologies Co. Ltd to its “Entity List”, which are companies that Americans are prohibited from doing business with. The Washington Post said the listing is also called the “death penalty”.
Huawei depends on American companies for chips for its equipment and its smartphones use Google’s Android operating system and some American phone companies operating in rural areas have depended on cheap telecommunications equipment from the Chinese giant. These transactions will be prohibited going forward, unless the commerce department issued a waiver for them.
The commerce department said the listing was based on an assessment that the Chinese company, Huawei, “is engaged in activities that are contrary to US national security or foreign policy interest”. The United States has had problems with other Chinese companies as well, such as ZTE, that it, believes, are backed by the Chinese government and operate on their behalf.
The United States has also told allies and partners in the past it will have to re-think and may not be able to share intelligence with them if they chose Huawei equipment for their 5G networks, which is considered to be 100 times faster than the current 4G.
