United States places Huawei and scores of affiliates on export-blacklist

Clay Curtis
May 20, 2019

US President Donald Trump this week moved to ban American telecom firms from installing foreign-made equipment that could pose a threat to national security amid US-China trade war.

Shortly after Trump's executive order, "the Commerce Department said it had added Huawei and 70 affiliates to its so-called Entity List-a move that bans the telecom giant from buying parts and components from U.S. companies without United States government approval", Reuters also wrote.

As this article was being written, CNBC reported that President Donald Trump had signed an executive order declaring a national emergency over threats to us technology.

With the executive order, the Secretary of Commerce has the authority to "prohibit transactions posing an unacceptable risk to the national security". But the Department of Commerce soon after on the same day added the company and 70 affiliated businesses to its "Entity List".

In addition to hurting Huawei and other big Chinese firms, this action will also harm big US technology firms like Qualcomm and Broadcom that do business with companies in that country.

Commerce Secretary Wilbur Ross said Trump had given his department 150 days to establish a process to screen USA companies' purchases of equipment from Huawei and other equipment providers with which officials have concerns.

China's Commerce Ministry also urged the U.S. not to implement the executive order that bars American companies from using telecommunications equipment made by Huawei. "Instead, this will only serve to limit the U.S.to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment, and eventually harming the interests of USA companies and consumers".

"The objective we have in mind here is we think there is a significant danger to national security and to our foreign policy of the existing situation at Huawei", Ross said.

However, these downturns were followed by signs of stabilisation, after tentative indications that the U.S. and China were prepared to resume talks in an effort to find a mutually acceptable solution to the trade dispute.

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Embassy amid increasing tensions in the region. "I just want to confirm what the objective of our pressure campaign (against Iran) is".

The action comes as the world's two largest economies ratchet up tariffs in a battle over what USA officials call China's unfair trade practices.

Huawei said that blocking it from doing business in the United States would hamper the introduction of next-generation communications technology.

A senior United States administration official, who briefed reporters on condition of anonymity, said in a hastily arranged call that the order was "company and country agnostic", and would not be retroactive.

Chinese Commerce Ministry spokesman Gao Feng stressed that the U.S. should avoid further damaging relations.

Huawei said it supplies 45 of the world's top 50 phone companies, but only about 2 percent of telecom equipment purchased by North American carriers in 2017 was Huawei-made.

"China has said many times national security issues should not be abused", Gao said, adding that "China is resolutely against any country taking unilateral action against any Chinese entity according to its domestic law".

If Huawei has to do business with other suppliers, Purdy warns that USA workers may be hurt along the way.

US sanctions "may not kill Huawei", as it likely has two years of inventory and it may be able to source alternative supplies from Japan, Zhang said.

When asked if Huawei's problems go away if trade negotiations were to be resolved, Purdy didn't seem overly optimistic.

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