The US President Donald Trump has signed an executive order effectively banning US organisations from doing business with Chinese telecom equipment makers Huawei and ZTE. Named 'Securing the Information and Communications Technology and Services Supply Chain', the order blocks transactions with companies controlled or influenced by a "foreign adversary" due to national security concerns.
Rumoured for the past year, the order is the latest move in Trump's trade war against China. This follows earlier measures against Chinese telecom companies, such as Department of Justice investigations for alleged sanctions violations and IP infringement, blocking public procurement and refusing US operating licences.
Trump effectively declared a national emergency in order to justify the order, citing the threat to US national security. As part of the order, the Secretary of Homeland Security and the Director of National Intelligence will conduct an assessment of the security risks.
The Executive Order prohibits transactions "that involve 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 a foreign adversary whenever the Secretary of Commerce determines that a transaction would pose a threat to national security", according to the text.
The Commerce Secretary will issue regulations within 150 days on how it plans to assess transactions under the security order.
Earlier, the Commerce Department added 12 companies to its so-called 'Entity List', requiring them to obtain prior approval through special licences in order to buy from or do business with US companies due to concerns they are dealing in components that could be used also for weapons materials, notably by Iran. The companies are from China, Hong Kong, Pakistan and the United Arab Emirates and include Yutron Technology, Tenco Technology, Longkui Qu, Avin Electronics and Multi-Market Electronics.
The Commerce Department later confirmed that it was also putting Huawei and several dozen of its affiliated companies on the Entity List As a result, any US business selling to Huawei would need to obtain a special licence from the department's Bureau of Industry and Security, which would likely be refused on security grounds. The department said the information it had pointed to Huawei engaging in activities "that are contrary to US national security or foreign policy interest". This includes the pending sanctions case against the company.
Huawei said that it expected the order would only harm US interests. "Restricting Huawei from doing business in the US will not make the US more secure or stronger; instead, this will only serve to limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment," the company said in a statement.
The industry group USTelecom called Trump's order a "national security issue of the highest order" and called on the government to work in close cooperation with the private sector to combat the threat. The group already co-chairs the U.S. Department of Homeland Security’s Information and Communications Technology Supply Chain Risk Management Task Force, a public-private partnership to identify and manage risk to the ICT supply chain. USTelecom also founded and co-leads the Council to Secure the Digital Economy, which brings together companies from across the ICT sector to combat emerging cyber threats.
