US govt considers making manufacturers produce US-bound equipment outside of China

The US government has started a 150-day review of the US telecom supply chain and has started asking telecom-equipment manufacturers if they could make US-bound equipment outside of China, The Wall Street Journal reported, citing sources close to the matter, which said talks were still at an early and informal stage. The request would affect the manufacture of towers, routers, switches and software, among other products. 

The executive order calls for a list of proposed rules and regulations by the 150-day deadline in October; proposals may take months or years to adopt. But the request, if it ever goes through, would force companies such as Nokia or Ericsson to move operations out of China in order to service the US, the biggest market in the world for telecom equipment and related services and infrastructure. China last year represented 45 percent of Ericsson’s manufacturing-facility area and 10 percent of Nokia’s according to analysts, not including subcontractors. The US does not manufacture mobile equipment itself. 

US officials are worried that Beijing could order Chinese engineers to insert security holes into technology made in China. They worry those security holes could be exploited for spying, or to remotely control or disable devices. That is also part of the reasoning behind the ban on Huawei. The White House declined to confirm or comment on specific discussions. “The fourth industrial revolution will be built on the telecommunications networks being constructed today,” a Trump administration official said. “It is critical that those networks be trusted.”