The US on Wednesday issued an executive order apparently aimed at banning Huawei Technologies Co (華為) equipment from US networks and said it was subjecting the Chinese firm to strict export controls.
Huawei would be the largest business ever subjected to the controls, a law enforcement measure that requires it to obtain US government approval on purchases of US technology, said Kevin Wolf, a former US assistant secretary of commerce for export administration.
“It’s going to have ripple effects through the entire global telecommunications network, because Huawei affiliates all over the planet depend on US content to function and if they can’t get the widget or the part or the software update to keep functioning, then those systems go down,” he said.
Photo: Reuters
Asked if that could include barring Google from selling its Android operating system, which Huawei uses on its handsets, Wolf said it would be premature to say until he has seen a published order from the US Department of Commerce’s Bureau of Industry and Security.
The executive order declares a national economic emergency that empowers the government to ban the technology and services of “foreign adversaries” deemed to pose “unacceptable risks” to national security.
It gives the department 150 days to come up with regulations.
The export restriction is “a grave escalation with China that at minimum plunges the prospect of continued trade negotiations into doubt,” Eurasia Group analysts said in a report.
It appears that the law invoked in the order, the US’ 1977 International Emergency Economic Powers Act, has never before been declared in a way that affects an entire commercial sector.
It has routinely been used to freeze the assets of designated terrorists and drug traffickers, and impose embargoes on hostile former governments.
Huawei said that blocking it from doing business in the US would hamper the introduction of next-generation communications technology.
“We are ready and willing to engage with the US government and come up with effective measures to ensure product security,” the company said in a statement.
The restrictions “will not make the US more secure or stronger,” the company said.
The US would be limited to “inferior, yet more expensive alternatives,” which would hurt companies and consumers, it added.
A senior US administration official, who briefed reporters on condition of anonymity, said in a hastily arranged call that the order was “company and country agnostic,” and would not be retroactive.
Officials said that “interim regulations” were expected before final rules were set, but were vague on what that meant.
“It signals to US friends and allies how far Washington is willing to go to block Huawei,” Council on Foreign Relations cybersecurity director Adam Segal said.
Many in Europe have resisted a fierce US diplomatic campaign to institute a wholesale ban on the company’s equipment in their 5G wireless networks.
Segal said that with US-China trade talks at a standstill, the White House “felt the time had finally come to pull the trigger.”
It is a “low-cost signal of resolve from the [US President Donald] Trump administration,” Segal said, adding that there is little at stake economically.
Huawei said it supplies 45 of the world’s top 50 phone companies, but only about 2 percent of telecom equipment purchased by North American carriers in 2017 was Huawei-made.
The domestic economic impact would be restricted mostly to small rural carriers for whom Huawei equipment has been attractive because of its lower costs, potentially making it more difficult to expand access to speedy Internet in rural areas.
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