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May 16, 2019
US President Trump has issued an executive order calling for major restrictions on technology suspected of assisting ‘foreign adversaries’.
In the Executive Order on Securing the Information and Communications Technology and Services Supply Chain Trump states that he reckons “foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services.” In response to that perceived threat he is empowering state officials and agencies to take pretty much whatever prohibitive action they deem necessary against any companies they consider to be under the influence of said adversaries.
The order is similar to the ban ZTE faced in 2017 which almost killed the business. Huawei, and 70 affiliate companies, have been placed on its ‘Entity List’ which could ban the company from purchasing US components. Although Huawei’s reliance on the US is not as notable as ZTE’s was, the firm’s supply chain could be disrupted by the White House. Once the order comes into effect, US firms will have to seek official permission from the Secretary of Commerce to work with and/or sell to the companies on the ‘Entity List’.
On one level this is merely an official confirmation of the position the Trump administration has had on this sort of thing for a while. But it’s also a distinct call for escalation and actively encourages state agencies to be more aggressive in their response to these threats and seems to absolve them of any responsibility to present evidence of wrongdoing before acting.
The words ‘China’ or ‘Huawei’ don’t appear anywhere in the executive order, but it’s pretty clear it’s a response to the ongoing issue of Huawei’s suspected ties to the Chinese state. Of course Huawei has spent the past few months repeatedly denying the allegations, but the US position has if anything hardened and there doesn’t seem to be any more the company can do to prove its innocence.
We received the following statement from Huawei in response to the executive order: “‘We are the unparalleled leader in 5G development. We are ready and willing to engage with the US government and come up with effective measures to ensure product security.
“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, and eventually harming the interests of US companies and consumers. In addition, unreasonable restrictions will infringe upon Huawei’s rights and raise other serious legal issues.”
Most of that has been publicly said by Huawei before, but the final sentence definitely hints at a formal legal response. Huawei has already opened one legal front challenging the legality of the sales restrictions already in place. Assuming US state agencies accept Trump’s invitation to act against it, Huawei may move to question the legality of the executive order itself.
As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno
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