Trump Administration Could Ban Products from ZTE and Huawei
President Trump is considering issuing an executive order in January that would ban US companies from purchasing telecommunications equipment made by Chinese vendors Huawei and ZTE. The executive order would be made under the 1977 International Emergency Economic Powers Act, which gives the President the power to regulate commerce if he believes the existence of an “unusual and extraordinary threat…to the national security, foreign policy, or economy of the United States”. The act, which was originally intended to limit the power of the President under the “Trading with the Enemy Act of 1917” which allowed a President to declare emergencies without limiting there duration, without citing violated statutes, and without congressional oversight, is typically used in cases of foreign human rights violations to freeze the US assets of violators.
Timing of such an executive order is concurrent with US/China trade negotiations, which are expected to begin again after the New Year and before 5G rollouts. As the largest telecom equipment supplier worldwide, Huawei already has significant non-US order for 5G equipment but has already been tacitly excluded from government 5G projects. The ban will put pressure on US carriers to find alternative suppliers. Local providers are still able to purchase Huawei equipment but an official ban could force some to remove existing Huawei equipment if they are unable to upgrade and the FCC is considering a rule that would actually force carriers to remove equipment (with no compensation) that is deemed to be a national security risk, which would be the case if the executive order is invoked.
The continued pressure on US allies has already caused Japan, Australia, Germany and New Zealand to make a similar ban official, and has caused other US allies to consider excluding Huawei from their 5G plans going forward, but an official order, while it would carry little weight with other governments, would carry significant political weight and will certainly garner headlines, which is likely the actual intention of such a ploy. Although the US government is trying to convince US citizenry that Huawei, ZTE, and implicitly all Chinese companies are spying on the US as it gets repeated endlessly in the media, there has been little current evidence that such is the case, and little has been said about US efforts to spy on the Chinese government, especially those that have been compromised by Chinese authorities.
The Trump administration is trying take a strong position in trade negotiations with China and slow the push by Chinese companies to become major players in the upcoming 5G world, while displacing US telecom suppliers as the world’s ‘technology leaders’. US technology is the best in the world, but stifling good technology, wherever it comes from, is a disservice to consumers worldwide.