After months of speculation, President Trump has signed an executive order giving the federal government the power to block US companies from buying foreign-made telecommunications equipment deemed a national security risk.
Under the order, which gives the secretary of commerce power to determine which transactions may be potential risks, no single company is immediately marked as a threat. But the plan is largely seen as a move against China-based Huawei, which some US lawmakers have deemed a security threat.
The US argues that China’s government could force companies like Huawei to install backdoors in their equipment to spy on American networks. Huawei has repeatedly denied that this could happen, and the company’s CEO and founder, Ren Zhengfei, has made defiant statements, saying that America’s campaign against the company won’t stop its international growth.
Last February, the heads of major US intelligence agencies, including the FBI, the CIA, and the NSA, told American citizens not to use Huawei or ZTE phones. The US has also pressured allies to stop using Huawei telecom equipment in national infrastructure. The move comes at a time of heightened tensions between the US and China, with the world’s two largest economies continuing to impose trade tariffs on one another.
As well as the potential for espionage, US law enforcement has accused Huawei of other criminal offenses. In January, the US Justice Department charged Huawei and chief financial officer Meng Wanzhou with a host of charges, including obstruction of justice and theft of technology. The US has accused Huawei of stealing cell phone testing technology from T-Mobile, with the director of the FBI commenting that the company “repeatedly refused to respect the laws of the United States.”
The White House’s order uses the International Emergency Economic Powers Act to implement the ban. The proposal has reportedly been in the works for more than a year.
In the order, the White House praised the idea of “an open investment climate,” but said “openness must be balanced by the need to protect our country against critical national security threats.”
In a statement, a Huawei spokesperson said the company was the “unparalleled leader in 5G” and suggested a ban would raise “serious legal issues.”
“We are ready and willing to engage with the US government and come up with effective measures to ensure product security,” the spokesperson said, adding that restrictions “will only serve to limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment, and eventually harming the interests of US companies and consumers.”
Curbs on Chinese telecom equipment in the US have already been the source of fierce debate, as companies like Huawei, as well as rural wireless carriers, have pushed back against limits on using the affordable equipment. Huawei has sued over a previous policy banning its use in the federal government.
FCC Chairman Ajit Pai, who was appointed to his post by President Trump, praised the decision in a statement. “Protecting America’s communications networks is vital to our national, economic, and personal security,” Pai said. “I therefore applaud the President for issuing this Executive Order to safeguard the communications supply chain.”
Update, 9:34PM ET: Includes statement from Huawei spokesperson.